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Sidley: New U.S. Export Controls on AI
webRelevant to AI governance discussions around compute controls and frontier model access restrictions; represents U.S. government efforts to limit diffusion of advanced AI capabilities to adversarial nations via export law.
Metadata
Importance: 55/100guidance documentanalysis
Summary
Sidley Austin provides legal analysis of updated Bureau of Industry and Security (BIS) export regulations that expand controls on advanced computing hardware and AI model weights. The regulations significantly broaden international technology transfer restrictions, with major implications for AI developers and exporters. This represents a key development in U.S. policy to limit foreign access to frontier AI capabilities.
Key Points
- •BIS updated export control regulations to cover advanced computing items and AI model weights as controlled technologies.
- •The rules significantly expand mechanisms for restricting international transfers of frontier AI-related technology.
- •AI model weights are now explicitly treated as export-controlled items, a novel regulatory development.
- •The regulations have broad implications for AI companies, cloud providers, and researchers sharing models internationally.
- •Sidley provides legal compliance guidance for entities subject to these new export control requirements.
Review
The new export control regulations represent a significant shift in U.S. technology policy, introducing unprecedented controls on AI model weights and advanced computing infrastructure. By implementing complex licensing requirements and geographic restrictions, the regulations aim to prevent adversarial nations from accessing cutting-edge AI and computing technologies. The methodology involves a multi-pronged approach: expanding geographic coverage of existing controls, creating strategic exceptions for U.S. allies, implementing total processing power (TPP) quotas, and directly restricting exports of high-compute AI model weights. While these measures demonstrate a sophisticated attempt to manage technological diffusion, they also introduce substantial compliance burdens for technology companies and raise questions about implementation and enforcement of the nuanced quota systems.
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New U.S. Export Controls on Advanced Computing Items and Artificial Intelligence Model Weights: Seven Key Takeaways | Insights | Sidley Austin LLP Global Arbitration, Trade and Advocacy Update
New U.S. Export Controls on Advanced Computing Items and Artificial Intelligence Model Weights: Seven Key Takeaways
January 16, 2025 Share
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PDF A4
On January 15, 2025, the U.S. Department of Commerce Bureau of Industry and Security (BIS) published in the Federal Register updated export controls on advanced computing items (including advanced integrated circuits (ICs) and related equipment, software, and technology) and, for the first time, controls on artificial intelligence (AI) model weights under the Export Administration Regulations (EAR). 1 These new regulations were published as an interim final rule and took effect on January 13, 2025, although compliance is not required until May 15, 2025. 2 BIS also published in the Federal Register a smaller companion rule on January 16, 2025, that expands licensing requirements on foundries and packaging companies seeking to export advanced computing equipment and requires compliance by January 31, 2025. 3
We summarize these complex new regulations and offer our key takeaways below.
Expanded IC Controls
The new January 15 regulations revise and expand controls on advanced computing items using a two-pronged approach. BIS is (1) significantly expanding the geographic coverage of existing advanced computing item controls and then (2) creating various exceptions for shipments that advance U.S. foreign policy interests.
The new regulations first modify the existing advanced computing item controls on U.S. adversaries and certain other countries of concern to restrict shipments to or within a wide range of additional countries. Certain advanced ICs (under export control classification number (ECCN) 3A090.a) and related items will soon require a license to be exported, reexported, or transferred in-country to any country in the world.
At the same time, BIS is expanding the extraterritorial reach of these controls. Under the existing advanced computing foreign direct product rule, a license is required to ship certain foreign-produced advanced computing items that are the “direct product” of specified U.S. software or technology to or within certain countries of concern. The new regulations provide that this restriction will apply when such items are shipped to or within any country.
The regulations then create several license exceptions for transactions likely to further U.S. interests:
Exports to allies. Exports to entities that are located and headquartered in the United States or one of 18 close U.S. allies, 4 and do not have an ultimate parent company headquartered outside those countries, are eligible for a new license exception (License Exception Artificial Intelligence Authorization). This exception will be available so long as the exporter obtains certif
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