HR 8306
SCALE Act
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Bill overview
The SCALE Act requires the Secretary of Commerce, in coordination with the Director of National Intelligence, to establish a yearly standard for the sale of certain integrated circuits to specific countries. This aims to limit the ability of adversaries, particularly China, to acquire advanced AI hardware and software, bolstering U.S. leadership in artificial intelligence and national security. The bill establishes performance metrics to assess AI hardware production capabilities and proposes an export control threshold based on those metrics, with a focus on preventing adversaries from reaching parity with U.S. AI hardware capacity.
Key provisions
- Establishes a yearly rolling standard for the sale of certain integrated circuits to specific countries.
- Requires the Secretary of Commerce and Director of National Intelligence to develop and publicly release performance metrics assessing AI hardware production.
- Sets an export control threshold based on the established metrics, aiming to limit adversary AI hardware accumulation.
- Defines ‘entity of concern’ to include organizations with significant foreign ownership or control.
- Creates a list of ‘countries of concern’ including China, Cuba, Iran, North Korea, Russia, and others.
- Mandates annual assessments of AI hardware production and potential adjustments to export controls.
- Establishes specific requirements for license applications, including certification regarding potential delays in fulfilling orders and preventing unauthorized remote access.
- Allows for the modification of metrics with a 90-day notice period and congressional review.
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119th CONGRESS — 2d Session
H. R. 8306
IN THE HOUSE OF REPRESENTATIVES
A BILL
To require the Secretary of Commerce in coordination with the Director of National Intelligence to implement a process for establishing a rolling annual standard for the sale of certain integrated circuits to certain countries.
This Act may be cited as the Semiconductor Controls Adjusted to Limit Exports Act SCALE Act
or the
.
It is the policy of the United States to—
lead in global diffusion of artificial intelligence (AI) hardware and software;
shape international markets so that foreign adversaries remain reliant on United States and allied supply chains for AI hardware and software;
pursue export promotion and export control agendas that enable the diffusion of United States AI hardware and software and enduring United States leadership in advanced artificial intelligence;
ensure that the United States and its allies consistently apply export restrictions to ensure national security objectives and prevent backfill amongst allied and partner nations;
limit the ability of adversaries to indigenize their own AI hardware production efforts, such limitation to include by crowding out their domestic markets with United States AI hardware;
provide business stability in export controls through a systematic and repeatable process that annually assesses that indigenous capability of an entity of concern to produce AI hardware and set export control thresholds to an entity of concern based on that process; and
prevent any foreign adversary from accumulating, through any combination of indigenous production, import, or third-party access, a quantity of AI hardware that approaches parity with the aggregate AI hardware capacity of the United States.
The metrics shall assess—
the capability of individual AI hardware items indigenously produced by each entity of concern;
the aggregate capability of all entities of concern to indigenously produce AI hardware items relative to the total demand for AI hardware of all entities of concern who purchase AI hardware; and
the aggregate estimated amount of AI hardware located within all countries of concern or owned or controlled by an entity of concern.
Such metrics shall include, but are not limited to, individual chip capabilities, or where applicable aggregated, in the following categories:
Total processing power.
Interconnect bandwidth.
Memory capacity bandwidth.
Not later than 90 days after each update to the metrics established under subsection (a), the Secretary and the Director, in coordination with other departments and agencies as such Secretary and Director determine necessary, shall submit a report to the appropriate congressional committees assessing the quantity and quality of AI hardware produced in each country of concern using such metrics.
The assessment required under paragraph (1) shall include—
for each metric, the aggregate estimated amount of AI hardware, broken down by quarter, installed in each country of concern, delineated by AI hardware produced by AI hardware designers that are an entity of concern and AI hardware produced outside of a country of concern and imported into a country of concern;
for each metric, the aggregate estimated amount of AI hardware installed outside of a country of concern and owned or controlled by any entity of concern;
for each metric, the aggregate estimated amount of AI hardware—
legally available to an entity of concern through remote access;
installed outside of a country of concern; and
not owned or controlled by an entity of concern;
a breakdown of subparagraph (B) in terms of the country of origin of the AI hardware designer (with respect to this subparagraph, the country of origin of a unit of AI hardware shall be considered to be the country in which the designer of that unit of AI hardware is domiciled);
for each metric, the combined total of the hardware identified in subparagraphs (A), (B), and (C), expressed as a percentage of the aggregate amount of AI hardware physically present in and intended for use within the United States;
a breakdown by country of origin of the aggregate amount of AI hardware physically present in and intended for use within the United States. For this purpose, the country of origin of a unit of AI hardware shall be considered to be the country in which the designer of that unit of AI hardware is domiciled; and
a technical assessment of the capability of the most advanced AI hardware designed by an entity of concern as compared to the state-of-the-art for that hardware.
The upper limit shall be implemented as a policy of denial for license applications to export, reexport, transfer (in-country), or provide remote access to AI hardware.
The upper limit for any individual item of AI hardware shall be set at a level not to exceed 110 percent of the performance, as measured by the metrics developed under subsection (a), of the most capable AI hardware item that meets the indigenous production threshold established under subparagraph (C).
An individual item of AI hardware produced by an entity of concern shall be considered in establishing the upper limit under subparagraph (B) only if such item is manufactured in sustained serial production at a volume sufficient to fulfill not less than 25 percent of the estimated annual aggregate demand for AI hardware among all entities of concern, as assessed by the Secretary using the most recent assessment under subsection (b). AI hardware produced solely in experimental, prototype, or limited demonstration quantities shall not be considered for purposes of establishing the upper limit.
If, at the time of any assessment under subsection (b), no individual item of AI hardware produced by an entity of concern meets the production threshold established under subparagraph (C), then applications for the export of or provision of remote access to AI hardware to any entity of concern shall be reviewed under a policy of denial.
In no case shall the upper limit established under this paragraph be lower than the upper limit in effect during the preceding assessment period, unless the Secretary provides a written determination to the appropriate congressional committees that a reduction is necessary to address a specific and identified national security threat.
For each metric established under subsection (a), the Secretary shall require a license for any export, reexport, transfer (in-country), or provide remote access to, AI hardware to any entity of concern, and shall review licenses under a presumption of denial if the approval of such license would cause the aggregate estimated amount of adversary AI hardware to exceed, in the aggregate, 5 percent of the aggregate estimated amount of AI hardware physically present in and intended for use within the United States.
On and after the date that is 24 months after the date on which the first assessment under subsection (b) is submitted, the Secretary may add, modify, or remove the metrics established under subsection (a), subject to the following:
The Secretary shall provide written notice to the appropriate congressional committees not less than 90 days before any such addition, modification, or removal takes effect, including a detailed justification for each proposed change and an assessment of how such change would affect the export control thresholds established under subsection (d).
No modification or removal of a metric under this subsection shall take effect if, within the 90-day notice period under paragraph (1), either the Committee on Foreign Affairs of the House of Representatives or the Committee on Banking, Housing, and Urban Affairs of the Senate submits to the Secretary a written objection stating that the proposed change would undermine the purposes of this Act.
Any license application to export AI hardware to any entity of concern reviewed under the upper limit established under subsection (d)(1) on other than a presumption of denial basis shall include certification by the applicant that—
the license will not result in any delay in fulfilling existing or new orders from customers in the United States for end use in the United States for any advanced-node integrated circuits produced by the applicant, taking into account normal lead times, and that global foundry capacity that would otherwise be used to produce similar or more advanced integrated circuits for end users in the United States will not be diverted to produce items authorized by the license;
for the AI hardware described in the license application, the aggregate total processing performance of such hardware exported to any entity of concern does not exceed 50 percent of the aggregate total processing performance of the same hardware shipped to customers in the United States for end use in the United States;
the items are not destined for military end use, military-intelligence end use, or weapons of mass destruction end use, and that the ultimate consignee will employ know-your-customer procedures to screen and prevent unauthorized remote access by prohibited parties;
prior to export, every shipment of AI hardware described in the license application will be reviewed by a qualified independent third-party testing laboratory headquartered in the United States, not under the control of any entity of concern, and having no financial interest in any party to the transaction, to confirm that the technical capabilities of the items are consistent with the representations in the license application; and
if the ultimate consignee or end user provides infrastructure-as-a-service, the consignee or end user will not transfer model weights trained on the exported AI hardware to any end user not disclosed in the license application, and will not provide any prohibited party with remote access to any model trained on such hardware.
Nothing in this Act may be construed to direct the Secretary to—
decontrol or reduce export control thresholds based on assessment findings; or
approve licenses for sales of AI hardware or software.
In this Act:
The term AI hardware means—
.zsuffix under the Commerce Control List (supplement number 1 to part 774 of title 15, Code of Federal Regulations (or a successor regulation)); and
any other item designated by the Secretary, by regulation, as AI hardware for the purposes of this Act.
The term aggregate estimated amount of AI hardware means the total quantity of AI hardware, as measured using the metrics established by the Secretary under section 3(a).
The term aggregate estimated amount of adversary AI hardware means the aggregate estimated amount of AI hardware—
installed across all countries of concern; or
accessible to any entity of concern, including through remote access to AI hardware installed outside of any country of concern.
The term appropriate congressional committees means—
the Committee on Foreign Affairs of the House of Representatives;
the Permanent Select Committee on Intelligence of the House of Representatives;
the Committee on Banking, Housing, and Urban Affairs of the Senate; and
the Select Committee on Intelligence of the Senate.
The term country of concern means—
the People’s Republic of China, including the Hong Kong and Macau Special Administrative Regions;
the Republic of Cuba;
the Islamic Republic of Iran;
the Democratic People’s Republic of Korea;
the Russian Federation; and
any other foreign country—
listed in the Country Group D:5 under Supplement No. 1 to part 740 of the Export Administration Regulations, as published on January 1, 2026;
designated by the Secretary of State as a country of concern for purposes of this section; and
notice of such designation has been published in the Federal Register.
The term Director
means the Director of National Intelligence.
The term entity of concern means any entity—
organized under the laws of any country of concern;
having its principal place of business in any country of concern;
of which more than 10 percent of the ultimate beneficial ownership is held, directly or indirectly, by one or more persons or entities that are organized under the laws of, have their principal place of business in, or are nationals of any country of concern; or
that is owned or controlled by, or acts on behalf of, the government of any country of concern.
The term indigenous production, with respect to AI hardware—
means AI hardware that is—
physically fabricated within the territory of the People’s Republic of China; and
designed by any entity of concern; and
excludes AI hardware that is designed by any entity of concern but fabricated outside of any country of concern for purposes of this Act.
The term remote access means access on a purposeful, knowing, reckless, or negligent basis to an item subject to the jurisdiction of the United States under this Act by a foreign person through a network connection, including the internet or a cloud computing service, from a location other than where the item is physically located if the Secretary determines that the use of the item could pose a serious risk to the national security or foreign policy of the United States.
The term Secretary
means the Secretary of Commerce.