On January 13, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced controls on advanced computing integrated circuits (ICs) and certain closed artificial intelligence (AI) model weights. “To strengthen U.S. security and economic strength,” the Biden-Harris administration released an Interim Final Rule (IFR) titled “Framework for Artificial Intelligence Diffusion.” The rule aims to balance national security interests with the promotion of AI innovation and responsible diffusion of technology. Below, we delve into the specifics of what items are controlled, the destinations affected, and the exceptions and authorizations provided under this new rule.
Effective Date & Comment Period
The IFR was technically effective immediately on January 13, 2025. However, compliance with the new requirements is not mandatory until May 15, 2025, giving companies time to familiarize themselves with the changes. BIS is accepting comments on the revisions and additions in this rule until May 15, 2025. The immediately effective and meaningful changes are the modifications to the Commerce Control List (CCL).
Controlled Items
The new export controls focus on two primary categories: (1) advanced computing ICs and (2) AI model weights. These items are classified under specific Export Control Classification Numbers (ECCNs), including 3A090.a and 4A090.a and items in the corresponding .z ECCNs, and new created ECCN 4E091.
- ECCN 3A090.a controls integrated circuits with one or more digital processing units having either: (1) a ‘total processing performance’ of 4800 or more; or (2) a ‘total processing performance’ of 1600 or more and a ‘performance density’ of 5.92 or more.
- ECCN 4A090.a controls computers, “electronic assemblies,” and “components” containing integrated circuits, any of which meets or exceeds the limits in 3A090.a. ECCN 4A090.b controls computers, “electronic assemblies,” and “components” containing integrated circuits, any of which meets or exceeds the limits in 3A090.b.
- New ECCN 4E091: Controls model weights of certain advanced closed-weight AI models. Model weights are numerical parameters within an AI model that help determine the model’s outputs in response to inputs. This control applies to AI models trained using computational power of 1026 or more computational operations.
This IFR updates foreign direct product rules (FDPR) for these items. BIS expanded the country and destination scope of controls on ECCN 3A090.a and 4A090.a items and the advanced computing FDPR to apply worldwide, replacing specific country group references with the term “worldwide” and specifying that foreign-produced items destined for or incorporated into non-EAR99 parts, components, computers, or equipment are covered globally. Additionally, the rule creates a new FDPR that applies these controls to certain model weights produced abroad using advanced computing chips made with U.S. technology or equipment.
Destination Controls
The rule introduces a three-tier country classification system, each with different levels of restrictions for the advanced AI chips:
- Generally Unrestricted Countries: This list includes 18 U.S. allies. These countries are:
- Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan, and the United Kingdom.
- Completely Restricted Countries: These are countries identified in Country Group D:5 of Supplement No. 1 to Part 740 of the Export Administration Regulations (EAR), which are subject to a U.S. arms embargo, and Macau. The full list includes:
- Afghanistan, Belarus, Burma, Cambodia, Central African Republic, China (including Macau), Cuba, Democratic Republic of the Congo, Eritrea, Haiti, Iran, Iraq, Lebanon, Libya, Nicaragua, North Korea, Russia, Somalia, South Sudan, Sudan, Syria, Venezuela, and Zimbabwe.
- Countries Subject to “Limited Quantities”: All other countries fall under this category.
Exceptions & Authorizations
To ensure that the new controls do not disrupt innovation or supply chains, the rule includes several exceptions and authorizations:
- License Exception Artificial Intelligence Authorization (AIA) / Exceptions for Certain Allies and Partners: Permits the export, reexport, or transfer (in-country) of advanced computing chips and otherwise controlled closed AI model weights without an authorization. This exception applies to a set of allies and partners (the Generally Unrestricted Countries listed above), as well as companies headquartered in the United States and these allies and partners. However, this exception does not cover exports to arms-embargoed countries.
- Exception for Open AI Models: Models with widely available model weights (i.e., open-weight models) are not subject to controls. Additionally, the model weights of closed models that are less powerful than the most advanced open-weight models, even if they exceed the 1026 threshold, are not controlled.
- License Exception Advanced Compute Manufacturing (ACM) / Exceptions for Supply Chains: Allows for the export, reexport, or transfer (in-country) of advanced computing chips, without an authorization, for the purposes of development, production, and storage of these chips, except to arms-embargoed countries. This license exception builds on the Temporary General License from October 2023 rule to prevent disruption of supply chains.
- License Exception Low Processing Performance (LPP) / Low Volume Exception: Allows limited amounts of computing chips to flow globally, except to arms-embargoed countries.
- Data Center Validated End User (VEU) Program: This program is bifurcated into:
- Universal VEUs (UVEU): Provides U.S. and certain allied and partner country entities with the opportunity to obtain a single authorization that will allow the company to build data centers around the world without additional authorizations, except in arms-embargoed countries.
- National VEUs (NVEU): Provides entities headquartered outside arms-embargoed countries the opportunity to obtain an authorization that will allow the company to build data centers in specified locations without additional authorizations, except in arms-embargoed countries.
By implementing a comprehensive framework that includes specific controls, destination restrictions, and various exceptions, BIS aims to protect U.S. national security while fostering global AI innovation. Compliance with most portions of the new rule is required by May 15, 2025, and interested parties may submit public comments until that date.