On January 13, 2025 the US Department of Commerce’s Bureau of Industry and Security (BIS) released an interim final rule that would impose new and expanded restrictions on the export of advanced AI technology and model weights. The new rule entitled Framework for Artificial Intelligence Diffusion details the BIS’ “tailored strategic approach to controlling the proliferation of advanced AI models” by ensuring the circuitry and model weights of the most advanced AI models are only sent to those destinations that present low risk of diversion and misuse. These changes are effective as of January 13, but the compliance date for the new license requirements outlined below is not until May 13. Public comments on the interim final rule are also due no later than May 13.

Below we outline the new BIS rule and key takeaways.

What Technology Is Restricted?

Amongst other requirements, the new rule requires a license to export, reexport, or transfer (in-country) the integrated circuits and/or model weights of the most advanced AI models to certain designated countries, absent an applicable license exception. Under this new regime, the US government will review applications for a license based on the “sensitivity of the destination, the quantity of compute power or performance of the AI model, and the security requirements agreed to by the recipient.”

The inclusion of export controls on model weights is significant. Model weights are numerical parameters within an AI model that help determine the model’s outputs in response to inputs. According to the BIS, the unchecked diffusion of model weights for advanced AI models presents a national security risk because such weights could be manipulated and misused by bad actors. The new rule therefore imposes a global licensing requirement on the model weights of the most advanced AI models – defined as the model weights of any closed-weight AI model that has been trained on more than 10²⁶ computational operations. Consistent with BIS’s approach to controlling other types of technology, the new rule does not control open-source model weights that meet this threshold.

BIS has also modified the existing advanced computing foreign direct product (FDP) rule, and created a new FDP rule for model weights, which further extends the territorial reach of the EAR to more items produced outside the United States.

Finally, to facilitate transactions that present lower risks or advance U.S. interests, BIS has also created new license exceptions applicable to model weights (Exception AIA) and certain advanced computing integrated circuits (Exceptions ACM and LPP), modified existing license exceptions ACA and NAC, and modified the Data Center Validated End-User Authorization.

Key Takeaways

• Be Mindful of Political Uncertainty. With a new incoming administration, it remains to be seen whether and to what extent this new rule will be adjusted. The incoming administration has telegraphed an interest in ensuring US AI policy be focused on increasing competitiveness across the AI ecosystem.
• Additional Model Weights May Come Into Focus. As new AI breakthroughs reduce the compute power to run advanced AI models, new and additional model weight restrictions may come into focus.
• Frontier AI Model Providers Must Tread Carefully. The new rule focuses on the hardware and compute capabilities of the most advanced frontier AI model providers. As these rules develop, frontier AI model providers will need to ensure their continued advancements, especially in the realm of agentic AI, are carefully reviewed at the inception and development stage to align with the new and expanding export restriction requirements. This includes understanding whether an item, software, or technology is subject to the EAR -- whether because it is U.S. origin or by operation of an FDP or de minimis rule -- and, if so, knowing the appropriate classification under the EAR.
• Responsible AI Governance Remains Important. The new BIS rule telegraphs the importance of organizations to have robust AI governance programs in place to ensure the building, development, distribution, and sale of AI products and services aligns with export restrictions and other regulatory requirements in the rapidly developing AI policy space.

To learn more about the new interim rule, or to learn more about Dentons’ AI and Export Control capabilities, please reach out to one of the co-authors listed.