U.S. Department of Commerce Issues Interim Final Rule Implementing Its Framework for Artificial Intelligence Diffusion

At a Glance

• On January 13, 2025, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) issued an interim rule amending the Export Administration Regulations (EAR) to implement its framework for artificial intelligence (AI) diffusion.
• The rule was effective on January 13, 2025, but compliance is not required until May 15, 2025, and comments on the rule are due no later than May 15, 2025.
• Companies operating in the AI and computing sectors should evaluate the parameters of the new controls on the model weights of certain advanced closed-weight AI models, the revised controls on advanced computing integrated circuits (ICs), the new and revised license exceptions in the rule, and the updates to the Data Center Validated End-User authorization.

On January 13, 2025, BIS issued an interim rule amending the EAR to, among other things, impose a new control on certain advanced AI model weights for certain advanced closed-weight dual-use AI models, and revise controls on advanced computing ICs to protect U.S. national security and foreign policy interests. The rule outlines a three-part strategic approach to controlling the proliferation of advanced AI models: (i) imposing a global licensing requirement to the export, reexport or transfer (in-country) of advanced computing ICs or the model weights of certain advanced AI models to any end user in any destination; (ii) providing license exceptions conditioned on compliance with certain security measures for validated end users or low-risk destinations; and (iii) imposing security conditions to safeguard the storage of certain advanced models in destinations that pose heightened risks of diversion and to mitigate the risk of diversion for advanced ICs. BIS implemented this strategic approach through the changes outlined below.

New Controls

BIS added a new control for AI model weights under Export Control Classification Number (ECCN) 4E091. Specifically, ECCN 4E091 covers “parameters” for advanced AI models, which are defined as having been trained utilizing 10²⁶ or more “operations.” “Parameters” refers to any value learned during training (e.g., network weights, biases, etc.) and “operations” include any subsequent training, such as fine-tuning the pre-trained model, but does not include the collection and curation of the input training data. The ECCN will be controlled for regional stability reasons to and within all destinations and for anti-terrorism (AT) reasons when destined to a country that has an AT:1 license requirement (i.e., Iran, Syria or North Korea).

Revised Controls

BIS revised the license requirements and review policy for ECCNs 3A090.a, 4A090.a, and corresponding .z items to establish a worldwide license requirement in new § 742.6(a)(6)(iii)(A) of the EAR.

• 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 3A090.b controls integrated circuits with one or more digital processing units having either: (1) a ‘total processing performance’ of 2400 or more and less than 4800 and a ‘performance density’ of 1.6 or more and less than 5.92; or (2) a ‘total processing performance’ of 1600 or more and a ‘performance density’ of 3.2 or more and less than 5.92.
• 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.

License Exception Additions and Updates

BIS expanded the country scope of License Exception Advanced Computing Authorized (ACA) and updated License Exception Notified Advanced Computing (NAC) notification procedures. BIS also added three new license exceptions, below, which apply to advanced computing ICs, AI model weights and related items:

• License Exception Artificial Intelligence Authorization (AIA) authorizes the export, reexport or transfer (in-country) of eligible advanced computing ICs and associated software and technology to entities located in a destination listed in paragraph (a) of supplement no. 5 to part 740 of the EAR, unless the entity either is headquartered outside of a destination specified in paragraph (a) of the supplement or has an ultimate parent company that is headquartered outside of a destination specified in paragraph (a) of the supplement. License Exception AIA can be used for ECCNs 3A090.a, 4A090.a, and related .z items and 4E091.
• License Exception Advanced Compute Manufacturing (ACM) authorizes the export, reexport and transfer (in-country) of eligible items (i.e., ECCNs 3A090, 4A090 and corresponding .z items) to a “private sector” end user that is located in a destination not listed in Country Group D:5 or Macau, provided it is not headquartered in and does not have an ultimate parent company headquartered in Macau or a destination specified in Country Group D:5, if the ultimate end use is the “development,” “production” or storage (in a warehouse or other similar facility) of such eligible items.
• License Exception Low Processing Performance (LPP) authorizes the export and reexport of low amounts of compute that do not present significant national security risks, up to 26,900,000 Total Processing Performance (TPP) of advanced computing integrated circuits per-calendar year to any individual ultimate consignees. LPP can be used for ECCNs 3A001.z.1.a, z.2.a, z.3.a, z.4.a; 3A090.a; 4A003.z.1.a, z.2.a; 4A004.z.1; 4A005.z.1; 4A090.a; 5A004.z.1.a, z.2.a; and 5A992.z.1.

Red Flag Guidance

BIS added new red flag guidance related to AI model weights. Namely, new red flag 28 aims to help U.S. Infrastructure as a Service (IaaS) cloud computing providers located in the United States identify potential diversion concerns when training an advanced AI model for a customer that is a U.S. subsidiary of a foreign entity and transferring the resulting model weights to that customer.

Advanced Computing Foreign Direct Product (FDP) Rule Revision and a New FDP Rule for Certain AI Model Weights

BIS expanded the destination scope of the advanced computing FDP rule in § 734.9(h)(2) of the EAR to align with new controls on ECCN 3A090.a and ECCN 4A090.a items. BIS also added a new FDP rule for the AI model weights in ECCN 4E091 (i.e., closed-weight models trained using more than 10²⁶ computational operations).

Changes to Data Center Validated End-User Authorization

BIS bifurcated the Data Center Validated End-User authorization into Universal and National Validated End-User authorizations. The Universal Validated End-User (UVEU) authorization, available to companies headquartered in the countries listed in paragraph (a) to supplement no. 5 to Part 740 of the EAR, provides the data centers that own their advanced computing capacity with a single authorization that will allow a UVEU to build data centers around the world. The National Validated End-User (NVEU) authorization, available to all entities headquartered in or located in a destination in Country Groups A, B, or D:1-D:4, except Macau or destinations specified in Country Group D:5, allows approved applicants to be listed in the EAR as NVEUs in supplement no. 7 to part 748 of the EAR. This listing will serve to notify exporters and reexporters that the NVEU location can receive exports and reexports under the authorization. NVEUs will be subject to cumulative TPP allocations identified in the rule.