The Department of Commerce is putting together a catalog of AI tools that will be given special export status by the federal government to be sold abroad.

The department issued a call for proposals to participating companies in the Federal Register, looking to create a “menu of priority AI export packages that the U.S. Government will promote to allies and partners around the world.”

The companies and technologies included “will be presented by U.S. Government representatives as a standing, full-stack American AI export package and may receive priority government advocacy, export licensing review and processing, interagency coordination, and financing referrals, subject to applicable law,” the department said in a Federal Register notice Friday.

The export package was mandated through President Donald Trump’s AI executive order last year, which described the export packages as part of a larger effort to “ensure that American AI technologies, standards, and governance models are adopted worldwide” and “secure our continued technological dominance.”

“The American AI Exports Program delivers on President Trump’s directive to ensure that American AI systems – built on trusted hardware, secure data, and world-leading innovation – are deployed at scale around the world,” Secretary of Commerce Howard Lutnick said in a statement earlier this month. “By promoting full-stack American solutions, we are strengthening our economic and national security, deepening ties with allies and partners, and ensuring that the future of AI is led by the United States.”

The executive order called for certain technologies to be included in the package, including AI models and systems but also computer chips, data center storage, cloud services and networking services, along with unspecified “measures” to ensure security and cybersecurity of AI systems.

The Commerce notice envisions offering multiple packages of AI technology from “standing teams of AI companies organized to offer a complete American AI technology stack to foreign markets on an ongoing basis.” There is no limit on the number of companies that participate in a consortium, and Commerce said there isn’t “any particular legal structure” required.

While the proposal at several points refers to these packages as “American AI,” the notice does specify that foreign companies can participate.

In fact, for certain categories like hardware, the total level of U.S.-made content only needs to be 51% or greater. Member companies providing data, software, cybersecurity or application layer services can’t be incorporated or primarily based in countries like China or Russia, where national security laws may compel them to work with foreign governments or hand over sensitive data.

The potential business would be broad, covering foreign public and private sector buyers in global, regional, and country-specific markets. It also includes the potential formation of separate, “on demand” packages of companies and products meant for “specific foreign opportunities.”

But the notice also states that final decisions will be made on the basis of “national interest” by principals at the Departments of Commerce, State, Defense and Energy, as well as the White House Office of Science, Technology and Policy.

Commerce does not intend to formally rank proposals or use fixed scoring formulas to approve packages of technology for the export program, and the language in the notice appears to give wide latitude to federal decisionmakers to determine whether a particular proposal meets the “national interest” threshold.

“A proposal that undertakes reasonable efforts to satisfy the 51 percent hardware U.S.-content presumption is not automatically entitled to designation, and a proposal that does not satisfy that presumption is not automatically disqualified,” the notice said. 

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As the Trump administration considers loosening restrictions on the sale of high-performance computer chips that power modern artificial intelligence systems to China, his Department of Justice continues to prosecute businesses and individuals who sell or divert these same technologies to companies based in China. 

On Monday, federal prosecutors announced that it had secured a guilty plea from a Chinese-American citizen Alan Hao Hsu and his company Hao Global for a multi-million-dollar scheme to funnel advanced AI computer chips to Chinese businesses.

In affidavits, investigators at the Department of Commerce’s Bureau of Industry and Security described the smuggled H100 and H200 chips as some of the most sensitive and controlled technologies under U.S. export laws. According to the plea agreement, his company sold NVIDIA chips totaling $160 million to Chinese businesses.

According to court documents obtained by CyberScoop, since at least Oct. 2024 through May 2025, Hsu and others used Hao Global to export, or attempt to export, more than 7,000 NVIDIA H100 and H200 Tensor Core GPUs that are used in many AI and high-performance computing systems. Prosecutors said these chips were designed “to process massive amounts of data, advancing generative AI and large language models and scientific computing.”

Hsu would receive business leads from companies in China looking to buy GPUs, and funding through shell companies and other transactions to purchase the chips under the auspice of legally reselling them to customers in the United States, Malaysia and Thailand. Instead, DOJ said those shipments were diverted to China and Hong Kong, and Hsu and his company allegedly falsified bills of lading – essentially a receipt of what goods were being transported – and loaded them up on boats bound for other countries.

In February 2025, BIS investigators seized one shipment of GPU baseboards in Atlanta that had “incorrect and misclassified shipping information.” The criminal complaint also names two other defendants: Fanyue Gong, a New York resident and owner of a Brooklyn-based technology company and Benlin Yuan, president of a Virginia IT firm, as a part of the conspiracy.

When federal agents visited a New Jersey warehouse managed by Gong’s company, an undercover agent observed employees relabeling Nvidia GPUs with labels for a fake company named SANDKYAN, and one employee told investigators they received instructions from Gong to relabel the boxes in an encrypted messaging app group chat and were paid in cash.

Hsu reportedly received payment for the chips from Chinese sources through bank accounts in Thailand, Malaysia and Singapore.

The plea agreement for Hsu, a naturalized U.S. citizen who lives in Fort Bend, Texas, notes that he has been informed his guilty plea could result in consequences for his immigration status, including potential denaturalization and deportation.  

It’s the second such case brought forward in the last month by the Department of Justice alleging that individuals and businesses selling high performance GPUs to China were violating export controls and threatening national security.

Last month, DOJ announced similar charges against four U.S. and Chinese nationals in Florida, Alabama and California for conspiracy, smuggling and money laundering. The group allegedly evaded export restrictions by sending NVIDIA GPUs to Malaysia and Thailand before routing them to China between 2023 and 2025.

Prosecutors in the case said that preventing these chips from reaching China was a matter of “safeguarding our country’s national security.” The individuals charged face lengthy jail sentences: the conspiracy and money laundering charges come with a maximum 20-year prison sentence, while smuggling carries a maximum of 10 years.

As Caleb Withers, a research associate at the Center for a New American Security, noted in a report on AI export controls, “smuggling of cutting-edge chips is widespread, and Huawei and Semiconductor Manufacturing International Corporation (SMIC) have in some cases still been able to get their hands on advanced equipment integral to helping them advance their chip production capabilities.”

Withers also argues that the Bureau of Industry and Security suffers from “chronic underresourcing” and notes that a single shipment of the high-end chips the agency is charged with protecting cost more than their annual enforcement budget.

But arguments by federal prosecutors that China’s access to these chips would fundamentally undermine U.S. national security contrasted with President Trump’s announcement the same day that he had personally informed Chinese President Xi Jinping that he would allow NVIDIA to sell the very same H200 chips to China and other countries. In doing so, he promised unspecified “conditions” that would protect U.S. national security.

“The Department of Commerce is finalizing the details, and the same approach will apply to AMD, Intel and other GREAT American companies, Trump wrote on Truth Social Monday.

Democrats were quick to pounce on the decision, arguing that the move would harm U.S. companies that benefit from chip restrictions while simultaneously boosting industry for a geopolitical adversary in China. Eight Senate Democrats said in a statement that the H200 chips approved for sale by the Trump administration are “vastly more capable than anything China can make” and warned that “gifting them to Beijing would squander America’s primary advantage in the AI race.”

“Chinese AI giant DeepSeek said as recently as last week that the lack of access to advanced American-designed AI chips is the single biggest impediment to its ability to compete with U.S. AI companies,” the senators said. “With this decision, President Trump is poised to remove that barrier.”

Another Democrat, Sen. Mark Warner, D-Va., said he believes U.S. dominance in AI hardware will come down to whether U.S. or Chinese products influence the global supply chain and criticized the White House for its lack of strategic vision.

“Unfortunately, the Trump administration’s haphazard and transactional approach to export policy demonstrates that it does not have any sort of coherent strategy for how we will compete with China, specifically as it relates to whose chips, tools, cloud infrastructure, and ecosystem will influence the most AI developers worldwide,” said Warner in a statement.

Earlier this year, a group of experts told Congress that AI chip export controls were among the most effective tools in slowing down Chinese companies in the AI race.

Some experts reached by CyberScoop said there was a crucial distinction between the DOJ’s legal prosecution of companies who are knowingly breaking established laws and the Trump administration’s policy shift around selling AI chips.

“Those businessmen allegedly violated export control laws, evaded licensing requirements, and engaged in smuggling,” said Elly Rostoum, a senior fellow at the Center for European Policy Analysis and former National Security Council staffer. “Even if the White House later decides to loosen restrictions, the DOJ still has an obligation to prosecute violations of the laws as they existed.”

Rostoum said federal prosecutors can’t retroactively excuse criminal conduct because policy preferences shift in the White House, and that a legal market for H200 chips should still leave room for prosecuting bad actors who use illegal means to do the same thing.

“Criminal smuggling operations that create a completely unmonitored black market where chips disappear into unknown end-uses with zero accountability,” she said. “Even if you support opening up some sales to China, you still want to prosecute smugglers because the black market undermines any attempt at strategic control.”

Chinese government officials, for their part, reportedly intend to put limits on how many domestic companies will be able to buy the chips as part of the country’s goal of establishing self-sufficient technology markets. According to the Financial Times, citing anonymous sources, regulators in Beijing have been discussing ways to permit limited access to NVIDIA H200 chips, with buyers likely going through an approval process where they must justify why they can’t purchase their chips from domestic providers.

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