Managing Export Control Risks in the AI Chip Ecosystem
Recent actions by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Department of Justice (DOJ) highlight how enforcement risk extends beyond manufacturers and exporters to include forwarders, financial institutions, and data center operators. Although U.S. policy direction remains uncertain as the previous administration has taken steps to ease some restrictions, this shift is unlikely to alter BIS’s and DOJ’s enforcement focus.
Enforcing export controls for advanced computing hardware (“AI chips”) has been a consistent priority across recent administrations. An increase in licensed trade will require additional resources to monitor and enforce license conditions, while a willingness to license some exports will naturally increase enforcement pressure to inhibit circumvention and illicit procurement.
This article summarizes recent policy developments and key enforcement actions in the AI ecosystem and describes compliance considerations, including tailored insights for cloud service providers, data center operators, and financial institutions.
I. Introduction
In recent months, the AI chip and wider semiconductor ecosystems have come under scrutiny as DOJ, in coordination with BIS, has conducted enforcement actions targeting the unlawful diversion of AI chips and other key technologies. Most recently, in January 2026, BIS entered into a $1.5 million settlement with a European company regarding the unlawful in-country transfer of semiconductor manufacturing items subject to the Export Administration Regulations (EAR) to a foundry facility on the Entity List by the European company’s China-based subsidiary.
On December 8, 2025, DOJ announced Operation Gatekeeper, which involved the disruption of exports and attempted exports by a multi-defendant network of at least $160 million worth of AI chips to mainland China and Hong Kong, and followed several other similar actions in the AI chip industry. In July 2025, DOJ and BIS entered into a resolution with a leading U.S. provider of electronic design automation software and semiconductor design technology regarding the unlawful export of those technologies to a Chinese entity on BIS’s Entity List, which included a $95 million administrative penalty and $45 million in forfeitures.
II. Policy Background
Between January and May 2025, BIS issued and then rescinded its Framework for Artificial Intelligence Diffusion, which would have expanded export controls on advanced computing integrated circuits (ICs), among other restrictions. The rescission announcement was not a signal of relaxed enforcement.
Rather, in parallel with the announcement, BIS released guidance creating a presumption that dealings involving certain China-linked AI chips would violate U.S. export controls. This presumption substantially increases the diligence expectations and enforcement risk faced by industry.
III. Overview of Enforcement Framework
BIS regulates the export, reexport, and in-country transfer of controlled items, with licensing requirements generally determined by the classification of the item and the country of destination, end user, and end use. Engaging in covered activities without a required license may violate the Export Control Reform Act (ECRA) and its implementing regulations, the EAR, 15 C.F.R. Part 730 et seq.
Enforcement actions can arise in various ways, from routine government activities—such as BIS end-use checks and port cargo detentions—to whistleblower reports. Export control investigations frequently proceed on parallel civil and criminal tracks.
IV. Recent AI Chip Enforcement Actions
In October 2022, BIS implemented additional controls that significantly expanded licensing requirements and compliance obligations for AI chips and related technologies, particularly in relation to China and companies headquartered there. Three notable enforcement actions include:
- Operation Gatekeeper: In December 2025, DOJ announced a successful operation dismantling a sophisticated smuggling network exporting controlled chips to mainland China and Hong Kong.
- Janford Realtor, LLC: In November 2025, charges were made against two U.S. citizens and two Chinese nationals for their alleged roles in a conspiracy to illegally export advanced AI chips to China.
- ALX Solutions Inc.: In August 2025, DOJ announced charges against two Chinese nationals for knowingly exporting advanced AI chips to China in violation of U.S. export controls.
V. Compliance Considerations
These enforcement actions reflect a consistent pattern of transactional and behavioral “red flags” identified in BIS’s May 2025 guidance. All companies operating in the AI ecosystem should reassess their compliance frameworks with an emphasis on early identification and remediation of export-control risk.
- Strengthen end-use and end-user verification: Enhanced diligence may be warranted where customers lack a legitimate business history.
- Scrutinize routing and transaction structures: Third-party country routing and opaque ownership structures may indicate diversion risk.
- Be alert to diversion tactics: Watch for requests involving relabeling and unusual storage arrangements.
VI. Conclusion
The recent wave of AI chip enforcement actions underscores a clear message: while policy frameworks governing advanced computing technologies may continue to evolve, enforcement risk remains. DOJ and BIS are willing to pursue complex, multi-jurisdictional investigations that reach well beyond manufacturers and exporters.
Companies that align their compliance programs now to anticipate these developments will be best positioned to manage regulatory risk and sustain lawful participation in the global AI chip ecosystem.
