New AI Chip Export Rules: What the BIS Policy Shift Means for Your Business

On January 15, 2026, the U.S. government changed how American companies can sell advanced computer chips to China. For years, these sales were essentially banned. Now there's a path forward, but it comes with serious conditions that will affect how semiconductor companies operate.

If you're running a chip company, designing AI hardware, or selling components that might end up in Chinese products, this affects you directly. Here's what changed and what you need to do about it.

First, Some Background: Why Chip Exports Matter

Computer chips are the building blocks of artificial intelligence. The most advanced chips, like NVIDIA's H200 or AMD's MI325X, can train AI systems that power everything from chatbots to military applications. The U.S. government worries that if China gets enough of these chips, it could use them for military or surveillance purposes that threaten American interests.

Since 2022, the government has essentially said "no" to almost every request to sell high-end AI chips to China. Companies needed a special license to export these chips, and the government's default answer was denial.

That just changed.

What the New Rule Actually Does

The Bureau of Industry and Security (BIS), the agency that controls what technology can leave the country, issued a new rule (FR Doc. 2026-00789) that creates a different approach.

The old rule: If you wanted to sell advanced AI chips to China, the answer was almost always no.

The new rule: If you meet six specific conditions, the government will actually consider your request on its own merits, rather than automatically denying it.

This applies to chips like the NVIDIA H200 and AMD MI325X. It does not apply to the most advanced chips, like NVIDIA's newest Blackwell series. Those remain off-limits.

Think of it like this: the government built a wall around chip exports to China. They've now installed a gate in that wall, but you need six different keys to open it.

The Six Keys: What You Must Prove to Export

Before the government will even consider your export license, you must provide six certifications. Here's what each one means in plain terms:

1. You're Actually Selling These Chips in America

You can't create special chips just for the Chinese market. The chips you want to export must already be commercially available to American customers. You'll need to show your U.S. sales data to prove it.

Why this matters: The government wants to prevent companies from designing "China-only" products that bypass the spirit of the rules.

2. Your Chip Manufacturer Puts American Customers First

Most advanced chips are manufactured by companies like TSMC in Taiwan. You need a written promise from your manufacturer that they're prioritizing capacity for American customers, not diverting it to serve Chinese orders.

Why this matters: There's limited manufacturing capacity worldwide. The government doesn't want American companies waiting in line behind Chinese buyers.

3. You Can't Sell More to China Than You Sell at Home

Here's a concrete number: your sales to China and Macau cannot exceed 50% of your sales to U.S. customers. If you sell 100 chips domestically, you can export at most 100 to China.

Why this matters: This ensures American companies aren't becoming primarily exporters to China while the U.S. market gets leftovers.

4. You Know Who's Actually Buying Your Chips

You must have documented procedures to identify the real people and companies buying your products. In legal terms, this is called "know your customer" or KYC. It's similar to what banks do to prevent money laundering, but applied to chip sales.

Why this matters: Chips often pass through multiple distributors before reaching the end user. The government wants to make sure your chips aren't ending up in the hands of the Chinese military through a chain of middlemen.

5. Your Buyer Promises Not to Use Them for Weapons

Standard language that prohibits military, intelligence, or weapons uses. But here's the catch: you need an actual system to verify and document these promises, not just a checkbox on a form.

Why this matters: A promise is only as good as your ability to enforce it. The government wants proof you're taking this seriously.

6. An Independent Lab Tests Your Chips Before Export

Before you ship anything, your chips must be tested by a U.S.-based laboratory that verifies they match your specifications. The government hasn't published a list of approved labs yet, so companies will need to identify qualified testing partners.

Why this matters: This prevents companies from claiming their chips are less powerful than they actually are to slip under the performance limits.

Why This Is Harder Than It Sounds

Reading this list, you might think: "Six conditions? That's manageable." But consider what each requirement actually means for your operations.

Building a testing pipeline: You need to find a qualified lab, negotiate a testing contract, establish protocols, and build testing time into your manufacturing schedule. For a startup, this could take months to set up.

Tracking your 50% ratio: Your accounting systems probably don't track the geographic distribution of your chip sales. You'll need to modify your ERP system, create new reports, and maintain documentation that can withstand a government audit.

Proving you know your customers: Semiconductor supply chains often involve multiple layers of distributors. Do you know who your distributor sells to? Do they know who their customers sell to? You might need to restructure your entire distribution approach.

Getting foundry commitments: TSMC and Samsung are serving customers worldwide. Asking them to put your U.S. orders first, in writing, isn't a simple request. It's a contract negotiation that requires careful structuring.

For large companies like NVIDIA with dedicated compliance teams, this is an expansion of existing processes. For a 40-person chip startup, this could consume a quarter of your company's attention for months. Building a scalable compliance program before you need one is now a strategic priority.

The Uncomfortable Reality: Sometimes "No" Is Easier

Here's something counterintuitive: the old "automatic denial" policy was actually simpler to follow. You didn't sell to China. Decision made.

The new policy creates a compliance treadmill. You invest in infrastructure, submit certifications, track ratios, maintain documentation, and wait for a license decision. There's no guarantee of approval. You're spending real money to apply for permission that might still be denied.

For some companies, especially smaller ones, the math might not work. The cost of compliance plus the risk of denial plus the 25% tariff (more on that below) might exceed the value of the sales. In that case, the rational choice is to keep doing what you've been doing: don't sell to China.

The government created an option, not an obligation. Not every company will find that option worth exercising.

The Strategic Question: Does This Policy Make Sense?

Policy experts have raised pointed questions about this approach. The Council on Foreign Relations published an analysis arguing that the rule is "strategically incoherent."

Their point is simple: if these chips pose a genuine national security risk when used by China, then allowing exports under certain conditions doesn't eliminate that risk. It just means American companies get paid while the risk continues.

The government's argument is that banning exports entirely was pushing sales to the black market anyway. Better to create a controlled channel with documentation requirements than to pretend a wall with no gate is actually keeping anything out.

There's also a business competitiveness argument. If American chip companies can't sell to China at all, they lose revenue that funds research and development. Over time, that could let Chinese chip companies catch up. Controlled sales might be the best way to maintain American technological leadership.

But critics counter: once the chips are in China, the paperwork doesn't control what happens to them. The certifications are process controls, not use controls.

This debate isn't resolved. It's playing out in Congress right now.

Congress Isn't Waiting: The AI OVERWATCH Act

On January 21, 2026, the House Foreign Affairs Committee advanced a bill called the AI OVERWATCH Act (H.R. 6875) by a vote of 42-2. That's not a close vote.

The bill would give Congress the power to review and block individual chip export licenses. Here's how it would work:

1. BIS approves an export license
2. Congress gets 30 days to review it
3. If Congress passes a resolution of disapproval, the license is blocked

This would add another layer of uncertainty for exporters. You could invest in the compliance infrastructure, submit perfect certifications, get BIS approval, and still have your license killed by Congress.

The bill also includes a two-year ban on exporting the most advanced chips (like NVIDIA's Blackwell series), putting into law what BIS currently maintains through policy.

If you're planning to invest in China export infrastructure, you need to factor in the possibility that Congress changes the rules.

Don't Forget the 25% Tariff

On top of the licensing requirements, there's now a 25% tariff on AI chip exports to China. This took effect the same day as the new licensing rules.

This means that even if you get a license, your China customers pay a 25% premium. Combined with your compliance costs, this significantly narrows the margin on these sales.

For pricing purposes, you need to decide: do you absorb the tariff to stay competitive, or pass it on and risk losing the sale?

Practical Takeaways

This week:

• Calculate how much you've shipped to China versus the U.S. in the last 12 months. Where do you stand against the 50% threshold?
• Review your current customer documentation. Do you have the information the rule requires?
• Assign someone to own this compliance project. This isn't a side task.

In the next 30 days:

• Talk to at least two testing laboratories about their capabilities and lead times
• Update your customer questionnaires to capture the required certifications
• Brief your board or leadership team. They need to understand the investment required and decide whether pursuing China sales is worth it.

In the next 60 days:

• Start conversations with your manufacturing partners about capacity prioritization commitments
• Establish a timeline for license applications if you're moving forward

In the next 90 days:

• If you've decided to pursue case-by-case licensing, submit your first applications
• Set up a system to monitor congressional activity. The rules might change.

What We're Watching

Looking Ahead

The government has created a new path to sell AI chips to China. Whether that path is worth walking depends on your situation.

If you're a large company with existing compliance infrastructure, this might represent meaningful revenue recovery. If you're a smaller company, the compliance burden alone might exceed the value of the sales.

What's clear is that "case-by-case review" isn't the relaxation it sounds like. It's a different kind of constraint, one that requires infrastructure, documentation, and ongoing effort that many companies aren't built to provide.

Build for the policy you have today. Budget for the policy Congress might create tomorrow. And recognize that in this area, stability is the exception, not the rule.