During the week of April 14, 2025, major U.S. chip suppliers NVIDIA Corporation (NVIDIA) and Advanced Micro Devices, Inc. (AMD) announced that the U.S. Department of Commerce's Bureau of Industry and Security (BIS) has imposed new export license requirements on certain artificial intelligence (AI) chips to China, Hong Kong, Macau, and other D:5 countries (i.e., those countries subject to U.S. arms embargoes), as well as companies headquartered in these countries or with their ultimate parent therein. Notably, the new controls cover NVIDIA's H20 chips and their equivalents, which were developed specifically for the Chinese AI market after the previous administration introduced controls on higher-end chips. These new export license requirements appear to be implemented through "is informed" letters issued directly to NVIDIA and AMD and are based on BIS's assessment of an unacceptable risk of diversion to Chinese supercomputers. 

Key Takeaways

• Foreshadowing of Stricter, Streamlined BIS Controls on AI Chips. BIS's new license requirements for NVIDIA and AMD likely presage a broader rewrite of the previous administration's export restrictions on the U.S. hardware, tools, software, and technology sought by China to expand its AI capabilities. Beginning in 2022, BIS issued a series of new restrictions designed to limit Beijing's access to top-tier AI-related advanced computing and semiconductor manufacturing items, while at the same time allowing major U.S. companies to continue to earn revenue from lower-tier chips – including NVIDIA's H20 chips – in the Chinese market. The new license requirements covering NVIDIA's H20 chips suggest that the administration has adopted a new calculus and may soon impose stricter controls that cut off a broader swath of items to China. Stricter controls will also likely offer the current administration an opportunity to streamline the existing controls on advanced computing and semiconductor manufacturing items.
• BIS Use of "Is Informed" Letters in Fast-Changing Policy Environment. In recent years, BIS has made increasing use of "is informed" letters and similar tools – letters issued by the BIS Deputy Assistant Secretary for Export Administration or a designee that privately "inform" the recipient of an unacceptable risk of diversion or other conduct contrary to the national security and foreign policy interests of the U.S. Under BIS regulations, this information triggers a license requirement for the recipient, such that BIS must approve future transactions involving the entity or the country that is the subject of the letter. Here, BIS likely used this tool to take quick action and prevent purported stockpiling of AI-related chips while new policy is being formulated. Exporters can expect additional "is informed" letters in relation to AI chips, as well as other high-priority, fast moving areas for the administration. 
• Heightened Enforcement Risk in Southeast Asia and Middle East. The U.S. government appears to be keenly focused on diversion of AI-related chips and other hardware to China through third countries, based on reports that Chinese companies acquired the hardware necessary to train advanced AI models via Singapore. Following last week's tightening of controls, BIS is likely to closely monitor shipments not only to China, but also to major trading hubs, countries with close trading relationships with China, and countries BIS may perceive as having weak export control systems. Accordingly, we expect closer scrutiny on shipments to and buyers in Malaysia, Singapore, Taiwan, Thailand, and the United Arab Emirates, although the enforcement focus may evolve if public and proprietary trade data show a shift in export patterns. 

For more information, please contact:

Timothy P. O'Toole, totoole@milchev.com, 202-626-5552

Leah Moushey, lmoushey@milchev.com, 202-626-5896

Melissa Burgess, mburgess@milchev.com, 202-626-5914 

Collmann Griffin, cgriffin@milchev.com, 202-626-5836

Caroline J. Watson, cwatson@milchev.com, 202-626-6083

Annie Cho, acho@milchev.com, 202-626-1570

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