The Highlights
- BIS Reaffirmed That Export Licenses Are Still Required for Certain Advanced Computing Exports: The May 31, 2026 guidance confirms that the licensing requirements first established in November 2023 remain fully in effect. Licenses are required for exports of advanced computing items to entities headquartered in Country Group D:5 countries (including China, Russia, and Iran), Macau, or entities whose ultimate parent company is located in those jurisdictions.
- Data Center Operators Received Limited Relief From the Uncertainty Created by the AI Diffusion Rule: While BIS rescinded the AI Diffusion Rule in 2025 and acknowledged concerns that it could hinder innovation and diplomatic relationships, the agency clarified that bona fide data center operators acting consistently with the EAR may continue using, storing, servicing, and disposing of advanced computing items without interruption, pending further notice. However, BIS did not provide a timeline for future guidance, leaving some uncertainty for operators.
- Companies Should Strengthen Compliance and Supply-Chain Due Diligence: BIS emphasized continued enforcement and national security concerns, making it critical for exporters to understand ownership structures, screen customers and affiliates, conduct end-user due diligence, maintain robust Know Your Customer procedures, and retain records for at least five years. Businesses should also prepare for potential future restrictions involving AI, model weights, computing thresholds, and semiconductor technologies.
The U.S. Department of Commerce’s Bureau of Industry and Security (BIS), with its May 31, 2026, guidance, clarified licensing requirements affecting AI, advanced computing, and data center operations. The guidance-maintained licensing requirements for shipping advanced computing items to certain destinations and companies but relaxed the requirements for bona fide operators of data centers who are otherwise engaged in activities consistent with the export administration regulations (EAR). The guidance comes after a year-long uncertainty following BIS’s recission in May of 2025 of the Artificial Intelligence Diffusion Rule first issued before the conclusion of the Biden administration in January of 2025. With its guidance, BIS explained that the previous AI diffusion rules would have been too burdensome on certain companies, stifled American innovation, and undermined diplomatic relationships with certain countries.
BIS Guidance on License Requirements for Advanced Computing Items
On May 31, 2026, BIS issued guidance on enforcement of license requirements for certain “advanced computing” items. The guidance clarifies that a license is required to export advanced computing items destined to (1) entities headquartered in Country Group D:5, which includes U.S. Arms Embargoed Countries such as China, Russia, and Iran; (2) those headquartered in Macau; or (3) those with an ultimate parent company headquartered in Country Group D:5 or Macau. In other words, even if an entity itself is located in a country not subject to export control restrictions on advanced computing, if their ultimate parent company’s location is located within Country Group D:5 or Macau, an export license is required.
The licensing requirement was first introduced on November 17, 2023. The guidance was released in response to questions regarding the preexisting licensing requirements established in November 2023, including whether they were still being enforced. BIS emphasized in the guidance that the answer is “yes” and that because the license requirement predates the AI Diffusion Rule, BIS will continue to enforce the November 2023 guidance. Thus, exporters should continue to seek BIS licenses for transactions that are subject to the rule.
The guidance also states that “bona fide operators of data centers who are otherwise engaged in activities consistent with the EAR are not required to cease the ongoing use, storage, disposal, or servicing of advanced computing items because of this guidance, until further notice from BIS.” However, the guidance does not provide a timeline for further notice from BIS, which may foreclose or impact data center operations.
BIS makes clear that it will continue to diligently protect U.S. national security and foreign policy interests. Thus, exporters should ensure they are aware of all entities within their supply chains and continue to conduct due diligence of end users.
Looking Ahead
Businesses should take time to review their Know Your Customer and due diligence policies. As BIS continues to evaluate export controls, there may be stricter controls or new rules related to artificial intelligence, model weights, computing thresholds, or chip regulations. Screening customers against restricted entity lists, verifying hardware and related capabilities, and keeping records for at least five years will ensure continued compliance with export control regulations.
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