US Considers Global AI Chip Export Licenses

The proposed global licensing requirement builds on a history of targeted U.S. export controls aimed at China, which began escalating in October 2022. These rules, administered by the Commerce Department's Bureau of Industry and Security (BIS), have already restricted companies like Nvidia from selling their most advanced AI chips, such as the H100, and even lower-powered versions specifically designed for the Chinese market, to China. The existing controls also limit the export of semiconductor manufacturing equipment and the ability of U.S. persons to support Chinese chip facilities. Concerns over third-country diversion are substantiated by recent events. In November 2025, the Justice Department charged four individuals in a scheme to illegally export Nvidia A100 and H100 GPUs to China through Malaysia and Thailand. Smuggling networks have reportedly become more sophisticated, using front companies and transshipment points in Vietnam, Taiwan, and Singapore to move entire servers full of chips into China. This has prompted bipartisan calls for chip-tracking legislation to ensure U.S. technology does not end up in unauthorized hands. The potential new regulations are significantly broader than previous actions. Drafts suggest a tiered licensing system based on the scale of the chip deployment. Small-scale shipments might undergo a simplified review, but large-scale AI cluster build-outs could require foreign governments to negotiate directly with the U.S. and even invest in American AI infrastructure. This marks a potential expansion of requirements previously applied to Middle Eastern nations to U.S. allies. This policy shift introduces significant regulatory volatility for the semiconductor industry. For chipmakers, it could stunt the massive AI-driven growth seen by companies like Nvidia, whose sales to China accounted for $17 billion, or 13% of its total, in 2024 before restrictions took hold. The on-again, off-again nature of export controls incentivizes buyers to over-order during permissive windows, creating a "bullwhip effect" that distorts demand signals across the supply chain. For Apple's domestic manufacturing initiatives, such as the expansion of its Houston facility for Mac mini and AI server production, these controls create a complex landscape. While Apple is increasing its U.S. investments with a new American Manufacturing Program, global export licensing could impact the international supply chains that even its domestic facilities rely on. The policy's impact on talent retention in Silicon Valley is also a key consideration, as engineers are drawn to companies working on cutting-edge projects with global reach.