BIS to Rescind Rule on Export Controls for AI Chips

The Bureau of Industry and Security announced May 13 several steps affecting exports of artificial intelligence chips.

Rule rescission. BIS will issue a Federal Register notice rescinding an interim final rule tightening export controls on advanced AI chips, will instruct agency enforcement officials not to enforce that rule (which was to have taken effect May 15) in the meantime, and will issue a replacement rule “in the future.”

China Chips. BIS has alerted industry that the use of Chinese advanced computing integrated circuits, including specific Huawei Ascend chips, risks violating U.S. export controls and may subject companies to substantial criminal and administrative penalties, up to and including imprisonment, fines, loss of export privileges, or other restrictions.  

U.S. Chips. BIS has warned the public about the potential consequences of allowing U.S. AI chips to be used for training and inference of Chinese AI models. Parties that do not obtain prior BIS authorization to engage in specified transactions or activities may be subject to potential civil or criminal enforcement action if an export violation occurs. In addition, foreign parties acting contrary to U.S. national security and foreign policy interests, including by training AI models that could support weapons of mass destruction or military-intelligence end-uses for or on behalf of parties headquartered in Country Group D:5 (including China) or Macau, may be added to the Entity List even where no export violation occurs.

Diversion. BIS has issued guidance to U.S. companies on how to protect against illegal diversion schemes involving advanced computing integrated circuits and commodities that contain them. This includes new transactional and behavioral red flags as well as recommended due diligence actions.