Export control compliance for running advanced AI chips

In short

The U.S. Bureau of Industry and Security (BIS) controls the export of advanced AI chips through the Export Administration Regulations (EAR). Most high performance GPUs and accelerators fall under ECCN 3A090 or 4A090. A license is needed to ship these items to China, Macau, and other restricted countries. In January 2026 BIS changed the policy so that direct exports from the United States of chips with a total processing performance (TPP) under 21,000 and DRAM bandwidth under 6,500 GB/s now get a case by case review. All other exports and reexports to China remain largely denied. The EAR also reaches foreign made chips that use U.S. technology. BIS has warned that giving remote cloud access to restricted users can trigger a license requirement. Civil penalties can reach $374,474 per violation. Recent enforcement actions have reached hundreds of millions of dollars. The legal framework for export controls on advanced AI chips is shifting quickly, with regulations undergoing frequent revision and certain provisions stayed pending further review. 15 CFR § 742.6, 91 FR 1684, 15 CFR § 734.9, BIS announcement

What are the U.S. export controls on advanced AI chips?

The Export Administration Regulations (EAR) at 15 CFR Parts 730 through 774 control the export, reexport, and transfer of dual use and other items. 15 CFR Parts 730-774 The authority for these controls comes from the Export Control Reform Act of 2018. 50 U.S.C. §§ 4801-4852 The Bureau of Industry and Security (BIS), part of the U.S. Department of Commerce, writes and enforces the EAR. If your company builds or runs an AI data center that uses high end GPUs or custom accelerators, you need to know which chips are controlled and when a BIS license is required.

The EAR covers more than putting a box on a truck. It regulates physical exports, reexports from one foreign country to another, and in country transfers within a foreign country. It also reaches certain foreign made items that are the direct product of U.S. origin software, technology, or equipment. This is the Foreign Direct Product Rule. 15 CFR § 734.9 The controls apply even when no money changes hands. Sending technical data by email or letting a foreign national see controlled equipment at a U.S. facility can count.

Violations can lead to severe civil and criminal penalties. This article explains the current rules as of May 2026. It focuses on what a compliance officer, general counsel, or developer needs to know about advanced AI chips, also called GPUs or accelerators, and the computers that hold them.

Which chips are controlled under the EAR?

The Commerce Control List inside the EAR gives every controlled item a five character Export Control Classification Number (ECCN). The main ECCNs for AI chips are 3A090 for integrated circuits and 4A090 for computers and assemblies that contain those circuits. 15 CFR Part 774, Supp. 1

To decide if a chip falls under ECCN 3A090 you compute its Total Processing Performance (TPP). TPP is a single number that captures a chip’s computing power. The EAR defines it as 2 multiplied by MacTOPS multiplied by the bit length of the operation. MacTOPS is the number of multiply accumulate operations per second in tera operations (one trillion operations per second). You sum that value across all processing units on the integrated circuit. [15 CFR Part 774, Supp. 1]

The rules also use a measure called performance density. It is TPP divided by the chip’s die area in square millimeters. BIS added performance density in October 2023 to close a loophole where companies would wire together many small chips to match the power of a single restricted chip. 88 FR 73458

The control thresholds are these.

• ECCN 3A090.a controls an IC that meets either of two tests.
  • TPP is 4,800 or more, or
  • TPP is 1,600 or more and performance density is 5.92 or more.
• ECCN 3A090.b controls an IC with TPP of 2,400 or more but under 4,800, and performance density of 1.6 or more but under 5.92.
• ECCN 3A090.c controls high bandwidth memory (HBM) stacks that have a memory bandwidth density greater than 2 gigabytes per second per square millimeter. This was added by BIS in December 2024. 89 FR 96790

A computer, electronic assembly, or component that holds one or more ICs meeting the 3A090.a limits is classified under ECCN 4A090.a. If it holds ICs meeting the 3A090.b limits it falls under ECCN 4A090.b. [15 CFR Part 774, Supp. 1]

In practice, NVIDIA’s H100, H200, B200 and AMD’s MI300X and MI325X all have TPP well above 4,800, so they sit in ECCN 3A090.a. Chips with lower performance might land in 3A090.b. The distinction matters because different license rules apply to different performance tiers.

What destinations and end uses trigger a license requirement?

A BIS license is needed to export, reexport, or transfer within a country any item under ECCN 3A090.a, 4A090.a, or corresponding .z items to a destination in Country Groups D:1, D:4, or D:5. 15 CFR § 742.6(a)(6)(iii)(B) That list includes China and Macau, the main targets of the controls. A license is also required if the exporter knows the item will be reexported to a restricted destination.

Separate end use controls under 15 CFR § 744.23 require a license for items that are destined for a supercomputer, advanced node IC production, or semiconductor manufacturing end use in China or Macau. A license is also needed when the entity involved is headquartered in or has an ultimate parent in Macau or Country Group D:5. 15 CFR § 744.23 This means that even if a chip does not fall under ECCN 3A090, it may still need a license if it is headed for a prohibited end use.

The Advanced Computing Foreign Direct Product Rule, at 15 CFR § 734.9(h), pulls foreign made chips into the EAR’s reach. If a chip meets the parameters of ECCN 3A090 or 4A090 and is the direct product of certain U.S. origin software or technology, or is made in a plant that is itself the direct product of such technology, and the destination or end use scope in 15 CFR § 734.9(h)(2) is also met, the chip is subject to the EAR. [15 CFR § 734.9(h)] As of January 2025 the destination scope of this rule was expanded worldwide. Enforcement of that worldwide scope is now in question after the AI Diffusion Rule rescission. But chips destined for China that use U.S. technology are clearly within EAR jurisdiction. For example, a chip fabricated at TSMC in Taiwan using U.S. electronic design automation (EDA) software and headed to a Chinese customer falls under the EAR and needs a BIS license.

How has the license review policy changed for China in 2026?

The license review policy tells you how BIS will decide a license application. Through most of 2022 to 2025 the policy for advanced AI chips going to China or Macau was a presumption of denial. That meant BIS would reject the application unless the exporter showed truly unusual circumstances. Several rule changes in 2025 and 2026 have made the picture more detailed.

The January 2026 split. On January 15, 2026 BIS issued a final rule that divided the review policy based on the chip’s performance. 91 FR 1684 For commodities with TPP under 21,000 and total DRAM bandwidth under 6,500 GB/s (specifically naming NVIDIA H200 and AMD MI325X), BIS now reviews license applications for exports from the United States to China or Macau on a case by case basis. For chips that exceed those thresholds, like the H100 or B200, the policy stays a presumption of denial. For any reexport or in country transfer to China, the policy is also a presumption of denial no matter the performance. [91 FR 1684]

The nine conditions. To get a license under the case by case tier, the applicant must meet all nine conditions listed in Supplement No. 2 to Part 748, paragraph (dd). They are.

1. The chip must be commercially available in the United States.
2. The applicant must provide data showing there is enough U.S. supply.
3. The transaction must not pull global foundry capacity away from U.S. customers.
4. The aggregate TPP of chips shipped to China or Macau cannot top 50 percent of the TPP shipped to U.S. end users.
5. The chips must not go to a prohibited end use or end user.
6. The ultimate consignee must keep know your customer (KYC) procedures.
7. The applicant must give a list of any remote end users in restricted countries.
8. The chips must pass independent third party testing in the United States.
9. The applicant must report the technical specifications of the chips.

[91 FR 1684]

Conditions 4 and 8 are especially demanding. The 50 percent volume cap means a chipmaker can sell to China only up to half as much (measured by TPP) as it sells to American buyers. The January 2026 BIS rule requires that certain advanced computing chips such as the NVIDIA H200 and AMD MI325X undergo independent third-party testing in the United States before they can be exported from the U.S. to China under a case-by-case license review.

The 25 percent tariff. On January 14, 2026 the President added a 25 percent tariff under Section 232 of the Trade Expansion Act on the same class of chips (TPP under 21,000 and bandwidth under 6,500 GB/s) when they are produced outside the U.S. and imported into the U.S. for re export. The tariff does not apply to chips imported for certain domestic U.S. uses, including data centers, repairs or replacements, research and development, startups, non-data center consumer applications, non-data center civil industrial applications, and public sector applications. Proclamation 11002 So a chip fabricated at TSMC in Taiwan and bound for China under the new case by case license must be shipped to the U.S., tested, tariffed at 25 percent, and then exported. This adds cost and logistical steps.

China’s response. In early 2026 China blocked imports of H200 chips at customs and, according to reports, warned domestic tech companies not to buy the H200 chips unless necessary. Tom’s Hardware, Reuters So even a BIS approved license may not lead to actual sales if China blocks the goods at the border.

Earlier 2025 actions. In April 2025 BIS used “is informed” letters to NVIDIA and AMD, effectively stopping exports of NVIDIA’s H20 and AMD’s MI308 chips to China. In August 2025 BIS approved export licenses for those chips. CRS R48642 As part of the deal, NVIDIA and AMD must share 15 percent of the revenue from those China sales with the U.S. Department of Commerce, according to BuiltIn. BuiltIn This episode shows that BIS can impose licensing on specific chips even when the formal policy has not changed.

What about remote access and cloud computing, the cloud loophole?

A major question is whether letting a foreign company use advanced AI chips by remotely accessing a server in a third country counts as an export under the EAR. Under current BIS practice, remote access to computing power is generally not treated as an export of the chips themselves. This gap is often called the cloud loophole. Introl

Two examples show the problem. In October 2025 a Shanghai company named INF Tech reportedly accessed 2,304 NVIDIA Blackwell GPUs (worth about $100 million) by leasing server time from an Indonesian telecom. Wall Street Journal via Introl Separately, Tencent entered contracts worth more than $1.2 billion to get most of 15,000 NVIDIA Blackwell B200 processors through the Japanese provider Datasection Inc., with the servers in an AI data center near Osaka. Financial Times In both cases the chips stayed outside China, but Chinese entities received the compute output.

BIS has tried to counter this through its policy statement on AI training, issued May 13, 2025. The statement says that exports, reexports, or in-country transfers of advanced computing ICs to any party such as IaaS providers, in-country transfers (change in end use or end user) of chips already in possession for AI training, and U.S. person support for AI model training all may trigger a license requirement under the catch all controls in Part 744 when the activity is for or on behalf of parties headquartered in Country Group D:5 or Macau and there is knowledge of a weapons of mass destruction or military intelligence end use. BIS AI Training Policy Statement BIS has publicly stated that access to advanced chips for AI training has the potential to enable such prohibited end uses. So a cloud provider who knowingly lets a Chinese military linked entity train AI models on its H200 servers abroad could be on the hook for a license violation.

The Remote Access Security Act (H.R. 2683) passed the House of Representatives 369 to 22 on January 12, 2026. The bill would amend the ECRA to give BIS explicit authority to regulate remote access. Congress.gov The Senate version, S. 3519, sits in the Senate Banking Committee as of May 2026. Until the bill becomes law, the legal basis for regulating cloud access remains BIS’s policy statements and catch all controls, which are untested in court.

What about AI model weights and the rescinded AI Diffusion Rule?

Model weights are the numerical parameters inside a trained AI model. In January 2025 BIS created ECCN 4E091 to control the export of certain closed weight AI model weights trained on more than 10^26 computational operations. 90 FR 4544

This control came as part of the AI Diffusion Rule, which also forced a worldwide license requirement for all 3A090.a items. The rule took effect January 13, 2025 but compliance was delayed to May 15, 2025. On May 13, 2025, two days before full compliance, BIS announced it was rescinding the rule, calling it a barrier to innovation. BIS Press Release, May 13, 2025 BIS told enforcement officials not to enforce it.

However, as of May 2026 the formal Federal Register notice to remove the AI Diffusion Rule from the EAR has not been published. GAO decision B-337935 The text still sits in the Code of Federal Regulations. BIS is not enforcing it, but a future administration could change that without new rulemaking. Some lawyers call this a zombie rule. The upshot is that the legal status of ECCN 4E091 (model weights control) and the worldwide license requirement for chips is uncertain. Companies that rely on the non enforcement take a risk.

What are the compliance obligations and due diligence requirements?

Beyond getting export licenses, companies that handle advanced AI chips face several ongoing compliance duties.

General Prohibition 10 (GP10). This is a powerful catch all rule. It says no person anywhere may sell, transfer, export, reexport, finance, order, buy, remove, conceal, store, use, loan, dispose of, transport, forward, or otherwise service, in whole or in part, any item subject to the EAR and exported, reexported, or transferred (in-country) or to be exported, reexported, or transferred (in-country) with knowledge that a violation of the Export Administration Regulations, the Export Control Reform Act of 2018, or any order, license, license exception, or other authorization issued thereunder has occurred, is about to occur, or is intended to occur in connection with the item. 15 CFR § 736.2(b)(10) BIS issued guidance on May 13, 2025 that creates a presumption that advanced ICs under ECCN 3A090 that are designed or produced by companies headquartered in China were likely developed or made in violation of the EAR. The guidance names the Huawei Ascend 910B, 910C, and 910D. BIS GP10 Guidance So any company that buys, resells, or uses those chips, even if the chips are already outside the U.S., risks a GP10 violation.

Due diligence for chipmakers. The January 2025 Due Diligence IFR, which BIS did not rescind, added Note 1 to ECCN 3A090.a. This note presumes that when a front end fabricator or OSAT company exports, reexports, or transfers an advanced logic IC made at the 16/14 nanometer node or below or using a non-planar transistor architecture, the item is 3A090.a and designed or marketed for datacenters, triggering worldwide license requirements unless the presumption is overcome. 90 FR 5298 The exporter can overcome the presumption in three ways, including (a) show the IC was designed by a designer on the BIS approved list, (b) show the IC is being exported to an approved designer for packaging by an approved OSAT, or (c) get a certification from the end user. This rule stays in effect and creates due diligence duties for foundries even for chips that may not look like AI accelerators.

U.S. person controls. Even when no EAR item is involved, U.S. persons (citizens, permanent residents, or companies) are barred from supporting the development or production of certain advanced ICs in China or Macau without a BIS license. 15 CFR § 744.6(c)(2) This means a U.S. engineer cannot help a Chinese semiconductor company design a chip that would meet the 3A090.a thresholds.

Validated End User (VEU) program. BIS expanded the VEU program in October 2024 to let pre approved AI data center operators receive advanced computing ICs without individual export licenses. 89 FR 80080 This is useful for building large AI data centers in friendly countries. The authorization does not cover destinations in Country Group D:5. So VEU cannot be used for China shipments. In September 2025 BIS removed certain PRC-based Samsung and SK Hynix facilities from the VEU program, effective December 31, 2025. [CRS R48642]

Ongoing screening. The January 2026 case by case conditions explicitly require a list of remote end users in restricted countries and KYC procedures. [91 FR 1684] In practice, compliance programs must screen all parties in a deal against BIS’s Entity List, Unverified List, and Military End User List. BIS’s Counter Diversion Guidance from May 2025 also warns about shell companies and other tricks used to send chips to China. BIS Counter-Diversion Guidance

What are the penalties and enforcement trends?

The consequences of exporting controlled AI chips without a license are severe.

Civil penalties. The maximum administrative civil penalty is the greater of $374,474 per violation or twice the value of the transaction. BIS Enforcement Penalties BIS can impose a penalty for each unauthorized export.

Criminal penalties. A willful violation of the EAR can lead to a criminal fine of up to $1,000,000 per violation and up to 20 years in prison. 50 U.S.C. § 4819

Recent enforcement actions. BIS and the Department of Justice have gone after major chip related cases.

• Applied Materials, February 2026, agreed to pay $252 million for shipping ion implanter equipment to a Chinese Entity List company through South Korea without a license in 2021 and 2022. BIS.gov
• Cadence Design Systems, July 2025, paid a $95 million civil penalty and a $45 million forfeiture for unauthorized exports of EDA software and technology to a Chinese entity on the Entity List. BIS.gov
• Exyte Management, January 2026, settled for $1.5 million for an unlawful in country transfer of semiconductor manufacturing items by its China subsidiary to an Entity List foundry. BIS.gov
• Operation Gatekeeper, December 2025, saw DOJ break up a network that tried to smuggle at least $160 million in AI chips to China and Hong Kong. Law firm analysis

These cases show BIS targets the exporter, intermediaries, foreign subsidiaries, and software companies. The FY 2026 budget for BIS increased by 23 percent, with extra money for semiconductor enforcement. [Morrison Foerster]

What open questions remain?

As of May 2026 several key issues in AI chip export controls are unsettled.

The zombie rule. The AI Diffusion Rule’s worldwide license requirement and ECCN 4E091 on model weights still sit in the EAR text. BIS is not enforcing them, but the formal rescission has not been published in the Federal Register. Parties that rely on the non enforcement take a risk that a future administration could change course. BIS press release, GAO decision

The Due Diligence IFR’s reach. The Due Diligence IFR’s license requirements for fabricators and OSATs were built on the structure of the AI Diffusion Rule. With that rule in limbo, it is not clear whether the Due Diligence IFR’s worldwide scope can stand on its own. BIS has not given clear guidance.

China’s import barriers. China’s decision to block H200 imports and discourage purchases undercuts the practical value of the January 2026 license policy. Even if BIS grants a license, the chips may not enter China.

RASA’s future. The Remote Access Security Act has strong House support but is stalled in the Senate. If it passes, BIS will have clear authority to regulate cloud access, which would close the loophole and force new compliance duties on cloud providers and AI data center operators.

The replacement rule. Commerce Secretary Lutnick has said that Commerce plans to allow US allies to purchase advanced computing ICs, provided the AI data centers running them and the cloud touching those AI data centers are operated by an approved American operator. Bloomberg via Freshfields No draft has been released. The scope and timing are unknown.

The knowledge standard. BIS’s wide use of the knowledge test in the AI training policy statement and GP10 guidance pushes the limits of what a company should be expected to know. How courts will handle these theories when an exporter claims it had no actual knowledge remains to be seen.

The tariff impact. The 25 percent Section 232 tariff on chips made abroad and imported for re-export may push chipmakers to expand U.S. fabrication, but in the near term it raises cost and supply chain friction.

Key takeaways

• Almost all high performance AI GPUs and accelerators fall under ECCN 3A090.a. A BIS license is needed to export them to China, Macau, and other D:1, D:4, D:5 destinations.
• The January 2026 rule shift allows direct U.S. exports of chips with TPP under 21,000 and DRAM bandwidth under 6,500 GB/s to China under case by case review, but with nine strict conditions, including a 25 percent tariff on imported chips meant for re-export.
• All reexports and in country transfers to China remain under a presumption of denial.
• The cloud loophole stays open. BIS relies on policy statements and catch all controls. The Remote Access Security Act would give BIS clear statutory authority if it passes.
• The AI Diffusion Rule is a zombie rule. Its text remains but BIS is not enforcing it. Do not rely on non enforcement as a legal defense.
• GP10 forbids any dealing with chips you know are tied to an EAR violation. BIS has said advanced ICs from Chinese headquartered design houses are presumptively violative.
• Penalties are massive. Civil fines can hit $374,474 per violation or twice the transaction value. Criminal penalties can reach $1 million and 20 years per violation.
• Enforcement actions are ongoing. Applied Materials paid $252 million. Cadence paid $140 million combined. Multiple criminal cases have been brought.
• Due diligence obligations for fabricators and OSATs stay in effect, demanding careful tracking of chip shipments and end user certifications.
• The regulatory environment changes fast. Companies must monitor the Federal Register, BIS guidance, and congressional action closely.

Frequently asked questions

Q:What is Total Processing Performance (TPP) and how is it calculated?

A:TPP is a metric that measures a chip’s total computing power. It equals 2 times the number of multiply accumulate operations per second (in tera operations) times the bit length of the operation, summed across all processing units on the chip. BIS uses TPP to decide if a chip falls under ECCN 3A090.a. 15 CFR Part 774, Supp. 1

Q:Does the EAR apply to chips manufactured outside the United States?

A:Yes. Under the Advanced Computing Foreign Direct Product Rule, a foreign-made chip is subject to the EAR if it meets the parameters of ECCN 3A090 or 4A090, is the direct product of specified U.S.-origin software or technology, and is destined to any location worldwide or incorporated into a non-EAR99 item. 15 CFR § 734.9(h) For example, a chip fabricated in Taiwan using U.S. EDA software is covered.

Q:If I am a cloud provider and a Chinese customer rents GPU time on my servers in Singapore, is that an export?

A:This is a gray area under the current EAR. BIS has said that exports, reexports, or transfers of advanced computing chips to foreign cloud providers can trigger a license requirement under catch all controls if there is knowledge of a prohibited end use, such as military-intelligence or WMD end uses. BIS AI Training Policy Statement The Remote Access Security Act, if passed, would make cloud access explicitly controlled.

Q:Can I use the Validated End User program to ship H200 chips to an AI data center in China?

A:No. The VEU program, as expanded in October 2024, cannot be used for destinations in Country Group D:5, which includes China and Macau. 89 FR 80080

Q:What is the penalty for exporting NVIDIA H200 chips to China without a license?

A:The civil penalty can reach $374,474 per violation or twice the transaction value. BIS enforcement penalties A willful violation can also lead to criminal fines of up to $1,000,000 and 20 years in prison per violation. 50 U.S.C. § 4819

Q:Is the AI Diffusion Rule gone?

A:Not entirely. BIS announced the rule’s rescission in May 2025, but the formal Federal Register notice has not been published. The text remains in the EAR. BIS is not enforcing it, but a future administration could restart enforcement. BIS press release, GAO decision

Q:What did the Due Diligence IFR change in January 2025?

A:The Due Diligence IFR added Note 1 to ECCN 3A090.a, creating a presumption that front end fabricators and OSATs are exporting 3A090.a ICs whenever they ship advanced logic chips made at the 16/14 nanometer node or below or using a non-planar transistor architecture, unless they overcome the presumption through one of three listed methods. 90 FR 5298

Q:Does the January 2026 case by case review apply to chips shipped from Taiwan to China?

A:No. The case by case review applies only to direct exports from the United States. A reexport from Taiwan to China would still face a presumption of denial. 91 FR 1684 To qualify for the case by case review, a foreign made chip must be imported into the U.S., tested in the U.S., and then exported from the U.S.

Q:What are the most important items for an internal compliance program?

A:Screen all customers, end users, and middlemen against BIS restricted party lists. Verify end use and end user. Put KYC procedures in place for remote end users as required by the January 2026 conditions. Train employees on GP10 restrictions, especially for Chinese designed chips. Watch BIS guidance and the Federal Register for rule changes. Consider getting outside export counsel for high value deals.

Q:Where can I read the full text of these regulations?

A:The full EAR is at 15 CFR Parts 730 through 774, available on the eCFR website. 15 CFR Parts 730-774 BIS also publishes rules and guidance on its website at www.bis.gov.

Subscribe to The Compute Law Brief

The Compute Law Brief is a free weekday newsletter on the law of AI infrastructure across tax, real estate, construction, power, and deals. The big US build markets and federal law. Three minutes a morning. No paywall, and no email gate to read the blog. Subscribe if you want it in your inbox.

Junde Liu, JD, LL.M. (Taxation) candidate at UF Law. Originally published on Compute Law Blog. This article is general information and does not constitute legal advice. Reading it does not create an attorney client relationship. The reader should not act on the basis of any content here without first consulting a licensed attorney in the relevant state. Last reviewed for accuracy May 23, 2026.