On January 15, 2025, the US Department of Commerce Bureau of Industry and Security (BIS) published an interim final rule (IFR) that imposes new controls on advanced computing integrated circuits (Advanced ICs) and certain artificial intelligence (AI) model weights.1 These new controls build upon and expand BIS’ existing suite of export controls on Advanced ICs and semiconductor manufacturing equipment and are intended to prevent adversaries and malicious actors from accessing the most advanced US AI models and the large clusters of Advanced ICs necessary to train such models. Although the new controls are expansive and global in nature, the IFR also creates new license exceptions and other authorizations to permit and facilitate transactions that promote US national security and foreign policy interests.
In summary, the IFR results in a global license requirement on the export, reexport, and transfer (in-country) of Advanced ICs and certain AI model weights. AI model weights are a critical piece of AI model training because they dictate the AI model’s ability to learn from data and make accurate predictions. Thus, as BIS emphasizes, an AI model that lacks trained model weights produces meaningless output, meaning AI model weights can be the most valuable element of an AI model. These new controls target the crucial role that Advanced ICs play in AI model weight development. Specifically, AI model weights for advanced AI models are produced only by training the model on significant amounts of data using vast quantities of Advanced ICs over a period of months or longer.
Therefore, in certain circumstances, the IFR also seeks to limit or cap, or impose other requirements based on, the quantity of Advanced ICs that a foreign person receives measured by the total processing performance (TPP) of such Advanced ICs. Basically, TPP represents the capability of the Advanced ICs, quantifying their capacity to process data, perform computations, and complete tasks. Training advanced AI models requires a significant, and ever increasing, amount of TPP, and therefore, such TPP caps and limits are intended to indirectly restrict the training of advanced AI models and development of AI model weights.
Although these new controls are restrictive and global in nature, the IFR establishes additional license exceptions and other authorizations that, together with existing license exceptions, create different paths to authorization and facilitate transactions that promote US national security and foreign policy interests. A notable license exception created is license exception Artificial Intelligence Authorized, which authorizes exports of eligible Advanced ICs and related items to entities located within Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden, Taiwan, United Kingdom, or the United States.
As explained in greater detail below, key highlights from the IFR include:
- Expanded existing controls on Advanced ICs controlled under Export Control Classification Numbers (ECCNs) 3A090.a, 4A090.a, and corresponding paragraph .z items;
- New controls for certain AI model weights under new ECCN 4E091;
- New license exceptions for such Advanced ICs and corresponding .z items and AI model weights;
- Updates to the Data Center Validated End-User (DCVEU) Program, bifurcating the DCVEU Program into the Universal Validated End-User (UVEU) Authorization and the National Validated End-User (NVEU) Authorization; and
- Revisions to export license application review policies.The IFR is effective as of January 13, 2025, but exporters, reexports, and transfers (in-country) are not required to comply with the changes until May 15, 2025 (except that paragraphs 14, 15, and 18 of supplement no. 10 to Part 748, relating to VEU chips and data baseline security requirements, AI-specific cybersecurity requirements, personnel security standards and practices, have a delayed compliance date of January 15, 2026). BIS is requesting that comments on the IFR be submitted by May 15, 2025.
1. Updated and New Controls
Expansion of Advanced IC Controls. The IFR expands existing controls by imposing a worldwide license requirement on the export, reexport, or transfer (in-country) of Advanced ICs classified under ECCNs 3A090.a and 4A090.a and related items. The IFR also makes a corresponding change to the Advanced Computing Foreign Direct Product (AC FDP) Rule, expanding the “destination scope” to account for the new worldwide coverage.
New Controls on Certain AI Model Weights. Additionally, the IFR creates new ECCN 4E091, which covers “parameters” for an AI model trained utilizing 1026 or more “operations” (Controlled AI Model Weights).2 Subject to certain exclusions, a license is required for the export, reexport, or transfer (in-country) of Controlled AI Model Weights to any destination worldwide. This license requirement applies to US-origin AI model weights and certain foreign-produced AI model weights pursuant to the new AI Model Weights FDP (AI FDP) Rule. Notably, this license requirement does not apply to “deemed” exports or reexports of Controlled AI Model Weights to persons employed by entities headquartered in or with an ultimate parent headquartered in Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden, Taiwan, United Kingdom, or the United States (as defined below, AIA Countries).
2. License Exceptions for Advanced ICs and Certain AI Model Weights
Notwithstanding these new expansive and global controls, the IFR also establishes new license exceptions that create different pathways to authorization for the export of such Advanced ICs and Controlled AI Model Weights.
A. License Exception Artificial Intelligence Authorization (Exception AIA)
Advanced ICs and Related Items. Exception AIA authorizes the export, reexport, and transfer (in-country) of eligible Advanced IC items to entities located within Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden, Taiwan, United Kingdom, or the United States (AIA Countries or AIA Country), unless the entity is headquartered outside of, or has an ultimate parent company headquartered outside of, an AIA Country. Exception AIA cannot be used to provide items classified under ECCNs 3A090.a or 4A090.a and related items to entities headquartered outside of or located outside of the AIA Countries for training Controlled Model Weights (i.e., model weights classified under ECCN 4E091).
Prior to export, reexport, or transfer (in-country) of certain eligible Advanced ICs or related items a certification must be obtained from the ultimate consignee relating to such items, and if the ultimate consignee is receiving certain eligible Advanced ICs or related items with a cumulative TPP of 253,000,000 the certification must also be submitted to BIS.
Certain AI Model Weights. Exception AIA also is the only license exception available for Controlled Model Weights, authorizing the export, reexport, and transfer (in-country) of such AI model weights to entities headquartered or whose ultimate parent company is headquartered in AIA Countries, subject to certain conditions.
B. License Exception Advanced Compute Manufacture (Exception ACM)
Exception ACM is intended to minimize the impact of the new controls on supply chains. Specifically, Exception ACM authorizes the export, reexport, and transfer (in-country) of eligible items to “private sector end users” that are not located in a D:5 Country (i.e., US arms embargo countries) or Macau so long as the items are utilized for specified ultimate end uses and other requirements are met. Additionally, the private sector end user cannot be headquartered or have an ultimate parent company headquartered in a D:5 Country or Macau to be eligible.3
C. License Exception Low Processing Performance (Exception LLP)
Exception LLP authorizes the export and reexport of up to 26,900,000 cumulative TPP of eligible Advanced ICs and certain related items per calendar year directly to a single ultimate consignee located in eligible destinations (i.e., low amounts of compute that do not present significant national security risks). Specifically, Exception LLP covers shipments directly to ultimate consignees located outside of D:5 Countries and Macau, as long as the ultimate consignee is not headquartered in and does not have an ultimate parent company headquartered in a D:5 Country or Macau.
Before using Exception LLP, an exporter or reexporter must obtain a certification from the ultimate consignee that the ultimate consignee has not received a cumulative of 26,900,000 TPP during the relevant calendar year under Exception LLP and that the transaction will not result in an exceedance of that limit. Exception LLP also includes certain reporting requirements for the exporter or reexporter and ultimate consignee that must be satisfied prior to exporting or reexporting eligible items.
D. Updated License Exception Notified Advanced Computing (Exception NAC) and Expanded License Exception Advanced Computing Authorized (Exception ACA)
Exception NAC. The IFR has updated Exception NAC to improve efficiency of the authorization. These updates primarily take the form of outlining specific information that is required for Exception NAC submissions to further streamline the notification and approval process.
Exception ACA. The IFR revises the destination scope of Exception ACA to reflect the global coverage of the new Advanced IC controls. Specifically, Exception ACA now authorizes, in part, the export, reexport, and transfer (in-country) of eligible Advanced IC items, except those designed or marketed for use in a datacenter and meeting the parameters of ECCN 3A090.a, to or within any destination worldwide (except a D:5 Country, Macau, or an entity headquartered in, or whose ultimate parent is headquartered in, a D:5 Country or Macau, wherever located).
3. Updates to the Data Center Validated End-User Program
The IFR divides the Data Center Validated End-User (DC VEU) Program into two different authorizations: the Universal Validated End-User (UVEU) Authorization, and the National Validated End-User (NVEU) Authorization.
UVEU Authorizations. To be eligible for a UVEU Authorization, the UVEU must be headquartered in, or have their ultimate parent company headquartered in, an AIA Country, and the UVEU datacenters may not be located in Macau or a D:5 Country. All UVEUs will be subject to limitations on where they can geographically allocate their AI computing power, which is measured by the aggregate TTP of the Advanced ICs that meet or exceed the parameters of ECCN 3A090.a.
NVEU Authorizations. To be eligible for a NVEU Authorization, the NVEU must be headquartered, have an ultimate parent company headquartered, or be located in one of many eligible locations4 except Macau or a D:5 Country. NVEU data centers can be built anywhere in the world, except in a D:5 Country or Macau. All eligible NVEUs will be subject to a per-company, per-country installed base allocation of TPP, which is measured by the collective computing power of items subject to ECCNs 3A090.a, 4A090.a, or corresponding .z paragraphs:
These allocations do not count towards or impact country allocations (discussed below). The IFR also confirms that multiple NVEUs may operate in a single country, with each NVEU subject to the quarterly allocations.
Clarification Regarding the DC VEU Program. The IFR also includes guidance and clarification from BIS regarding applications for the DC VEU Program. Specifically, BIS notes that the party that has ownership of the advanced compute (i.e., the advanced computing systems, technologies, and infrastructure) should submit the DC VEU application. If that party cannot directly certify to all of the DC VEU application information, it must provide BIS the identities of other entities involved in the data center operations. If the operator of the advanced compute is different from the owner of the advanced compute, both the advanced compute owner and the advanced compute operator must have a VEU authorization.
IV. Changes to License Applications and Review Policies
If a proposed transaction does not meet the requirements of a license exception and the end user does not participate in the DC VEU Program, an export license will be required. The IFR has revised applicable license application requirements and review policies.
A. Advanced ICs and Related Items
D:5 Countries or Macau. Applications for the export, reexport, or transfer (in-country) of Advanced ICs and related items to or within a D:5 Country or Macau, or an entity headquartered in, or whose ultimate parent company is headquartered in, a D:5 Country or Macau will be reviewed under a presumption of denial.
AIA Countries. Applications for the export, reexport, or transfer (in-country) of Advanced ICs and related items to or within an AIA Country, or to an entity headquartered in, or whose ultimate parent company is headquartered in, an AIA Country will be reviewed under a presumption of approval.
Remaining Destinations and TPP Allocations. For applications or the export, reexport, or transfer (in-country) of Advanced ICs and related items to or within remaining destinations, the application review policy depends on whether the country TPP allocation has or has not yet been exceeded:5
- A presumption of approval will apply up to a per-country allocation of 790,000,000 TPP for 2025 – 2027 to applications for exports, reexports, and transfers (in-country) to or within destinations other than a D:5 Country or Macau or to entities not headquartered in or whose ultimate parent company is not headquartered in a D:5 Country or Macau.
- A policy of denial will apply after country TPP allocations are met.
Increased Allocations for Government Assurance Countries. TPP allocations may be increased up to 100% for countries whose government has provided assurances to the US government that it is committed to protect Advanced ICs consistent with US national security interests (Government Assurance Countries). Such countries will be listed in the EAR once the US government determines that such country has provided the appropriate national security assurances.6 Therefore, the allocation license policy above will apply up to the adjusted country allocations.
IV. Conclusion
Although the IFR imposes expanded and new controls on crucial and sensitive Advanced ICs and certain AI model weights, the level of restriction is qualified by the various new license exceptions and other authorizations created to facilitate low-risk transactions. As with previous rules relating to export controls on Advanced ICs, these new controls are legally complex and can be challenging to navigate. Therefore, both US companies and non-US companies involved in the Advanced IC market, data center operations, and advanced computing and AI will need to review carefully the implications of these new controls on their activities and seek guidance as required.
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1 Framework for artificial Intelligence Diffusion, 90 Fed. Reg. 4544 (January 15, 2025).
2 For the purposes of 4E091, “parameters” means any value learned during training (e.g., network weights, biases, etc.). Parameters for an AI model are also known as “model weights” And can be considered information, which BIS is controlling in Product Group E (covering Technology) of Category 4 (covering Computers). The term “operations” means the mathematical operations used for pre-training and any subsequent training, such as fine-tuning the pre-trained model but does not include the collection and curation of the input training data.
3 For the purposes of Exception ACM, “private sector end users” means an individual who is not acting on behalf of any government (other than the US government) or a commercial firm (including its subsidiary and parent firms, and other subsidiaries of the same parent) that is not wholly owned by or otherwise controlled by any government (other than the US government).
4 Eligible locations are any destination in Country Group A, B, D:1, D:2, D:3, or D:4 (except Macau or a D:5 Country).
5 BIS intends to calculate progress towards allocations by totaling the TPP of 3A090.a, 4A090.a, and corresponding .z items licensed to each destination cumulatively beginning in 2025. Updates on whether any such allocations have been met can be found at www.bis.gov/advanced-compute-resources. BIS intends to coordinate with the US Departments of State, Energy, and Defense to review allocations for subsequent years on an annual basis.
6 Specifically, the Government Assurance Countries will be listed in paragraph (b) to supplement no. 5 to Part 740 of the EAR.
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