What It Means for the Tech Industry
On 13 January 2025, the US Department of Commerce Bureau of Industry and Security (BIS) introduced fresh restrictions on exporting advanced artificial intelligence (AI) chips and certain closed AI model weights. The move, which was widely anticipated, has already drawn criticism from major tech and semiconductor firms.
The new Framework for Artificial Intelligence Diffusion rule introduces a global licensing requirement for exporting advanced AI chips and model weights, with some exceptions for allied countries. Compliance will be required by 15 May 2025, and stakeholders have until the same date to submit comments.
What’s Covered by the New Rule?
BIS has widened controls on advanced computing integrated circuits (ICs), specifically those classified under Export Control Classification Numbers (ECCNs) 3A090.a and 4A090.a. This means that chips with high processing capabilities and components containing these ICs will now require a license for export.
Additionally, a new classification (ECCN 4E091) has been introduced to control closed-weight AI model weights—key numerical parameters that influence AI model outputs. Companies will need a licence to export AI model weights if they’ve been trained on more than 1026 computational operations.
Country Classifications: Who’s Affected?
BIS has divided countries into three tiers with different levels of restrictions:
- Unrestricted countries: The UK, along with 17 other allies, faces minimal restrictions.
- Completely restricted countries: Nations such as China (including Macau), Russia, and Iran fall under a total export ban.
- Limited allocation countries: All other countries will be subject to strict limits on the quantity of advanced AI chips they can receive between 2025 and 2027.
What About License Exceptions?
To soften the impact, BIS has created several exemptions:
- AI Authorisation Exception (AIA): Allows exports to trusted allies without specific authorisation.
- Advanced Compute Manufacturing Exception (ACM): Supports chip production and storage, with restrictions on arms-embargoed nations.
- Low Processing Performance Exception (LPP): Allows limited exports globally, excluding arms-embargoed countries.
What Does This Mean for the Tech Industry?
The rule has sparked concerns that it could hinder innovation and competitiveness, particularly for companies relying on cross-border AI development. While the UK enjoys an exemption from many restrictions, businesses operating internationally will need to stay alert to these changes.
For companies affected by the new requirements, compliance efforts will need to ramp up before the May deadline. Keeping track of regulatory updates and understanding the impact on supply chains will be key.
If your business is likely to be impacted, now is the time to review the details of the rule and consider submitting a comment before the deadline.
