BIS’s New 2026 License Review Process for AI Chips

1. Case-by-Case Review for Certain AI Chip Exports: Instead of presumptively denying licenses, BIS will review exports of specific advanced, existing AI chips to China and Macau individually, but only if the chips meet strict performance and availability criteria and are not exported to listed entities or prohibited end use.
   
   
2. Mandatory, Detailed Certification Requirements: To qualify for a license, companies must certify adequate U.S. supply, no diversion of products, a 50% cap on China/Macau shipments, strict “know your customer” procedures, and independent U.S. testing verifying chip performance.
   
   
3. New Pathways Come with Major Compliance Obligations: While the rule opens new opportunities for AI-chip suppliers, they must comply with the stringent due diligence and verification processes in seeking a license under the new BIS rule.
   

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On January 13, 2026, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) issued a final rule revising its license review policy for exports of certain semiconductors to China and Macau, including NVIDIA H200 and AMD MI325X chips, two prominent AI (artificial intelligence) chips employed for large language model (LLM) training and inference. The rule, effective on January 15, 2026, changes the default from a presumption of denial to a case-by-case review for AI chip exports. BIS characterized the change as “necessary to ensure the national security benefits of U.S. leadership in artificial intelligence.”

The case-by-case review is only available for a narrow set of advanced computing chips that fall below predefined performance thresholds. Additionally, eligible semiconductors must be commercially available in the United States at the time of publication of the rule; and the exporter must comply with a statement certifying the following:

1. Abundant U.S. Supply:  There is a sufficient supply of the product in the United States, and the exporter must report how many units of the product have been sold to U.S. customers for use in the U.S.
2. No Diversion:  There is sufficient supply in the U.S. such that production of the product for exports to China does not divert global foundry capacity for similar or more advanced products for end users located in the U.S.
3. 50% Cap:  The aggregate shipments of the product to China and Macau do not account for more than 50% of the total quantity of the product that the exporter has shipped to U.S. customers for U.S. end use, ensuring that at least half of the product supply remains available for the U.S. market.
4. No Prohibited Use or Controlled Entity:  The export must not be for any prohibited end use or end users, and no parties on the entity list or specially designated national list or other blocked persons will have access to the items.
5. Know Your Customer Procedures:  The ultimate consignee receiving the product has stringent, rigorous Know Your Customer procedures that will prevent the products from being used in prohibited end uses or by prohibited end users.
6. User Identifications:  The exporter has provided a list of remote end users (for those located in certain countries).
7. Independent Testing:  The exporter has verified the item undergoes independent, third-party testing in the U.S. to verify its performance specifications.

While the rule loosens the previous, strict presumption of denial of licenses, reexports of the same items from other countries and in-country exports remain subject to the presumption of denial. In addition, while the current administration announced in May 2025 that there would be a recission of the Biden-era AI diffusion rules, those rules remain in effect.

The rule broadens business and marketing opportunities for exporters and manufacturers of advanced computing commodities. However, it also comes with additional business, due diligence, and compliance requirements and procedures. Many companies will leverage such licenses for exports to expand their businesses, sales, and markets. At the same time, these companies should stay proactive in meeting these detailed certification requirements, which are critical to obtaining and maintaining a license. These proactive, critical efforts should include independent testing, adequate due diligence, proper know-your-customer procedures, reasonable investigations, and continued recordkeeping.