Commerce Announces New Trade Controls Affecting Quantum Technologies and AI Developers

The Department of Commerce, Bureau of Industry and Security (BIS) just announced two developments impacting the Artificial Intelligence (AI) and advanced technologies sectors. Specifically, BIS imposed the first export controls designed to capture leading-edge quantum technology. The new controls focus on computers and related equipment designed to perform calculations at speeds that typical computers are incapable of, as well as technologies used to manufacture advanced semiconductors. BIS also published a proposed rule that would, for the first time, impose requirements and reporting obligations on companies that are developing cutting-edge AI technologies. The AI technologies covered by the proposed rule are large-scale AI models that could easily be modified to perform tasks that pose a risk to national security, defined in the rule as dual-use foundation AI models.

Quantum Computing Export Controls

On September 5, 2024, the Department of Commerce announced an interim final rule (IFR) implementing export controls on quantum computing technology and other advanced technologies. The affected technologies are:

• Quantum Computing Items: Quantum computers with certain performance capabilities, defined primarily in terms on qubits, and related equipment, components, materials, software, and technology that can be used in the development and maintenance of quantum computers;
• Advanced Semiconductor Manufacturing Equipment: Tools and machines that are essential for the production of advanced semiconductor devices;
• Gate All-Around Field-Effect Transistor (GAAFET) Technology: Technology that produces or develops high-performance computing chips that can be used in supercomputers; and
• Additive Manufacturing Items: Equipment, components, and related technology and software designed to produce certain metal or metal alloy components.

The IFR adds Export Control Classification Numbers (ECCNs) to the Commerce Control List to cover the identified advanced technologies and establishes a worldwide license requirement for their export, reexport, or transfer (in-country). The 18 new ECCNS are: 2B910, 2D910, 2E903, 2E910, 3A901, 3A904, 3B903, 3B904, 3C907, 3C908, 3C909, 3D901, 3D907, 3E901, 3E905, 4A906, 4D906, and 4E906.

The IFR is part of the United States’ broader effort to control the export of sensitive technologies. BIS hopes these controls will bring the United States into alignment with allies that have similarly restricted the export of these technologies, such as Japan and the Netherlands. To that end, the IFR introduces a new license exception, License Exception Implemented Export Controls (IEC), which provides that countries that implement similarly stringent export controls on the covered technologies will be exempted from the new worldwide license requirement.

Proposed Reporting Requirements for AI Developers

On September 9, 2024, BIS released a Notice of Proposed Rulemaking outlining a new reporting requirement for AI developers and certain computer service providers related to large dual-use foundation AI models and activities exceeding specified, very high computational capability. The proposed rule would obligate such organizations to provide BIS with quarterly reports. Under the proposed rule:

• U.S. Persons developing dual-use foundation AI models must report on the following:
• any ongoing or planned activities related to training, developing, or producing dual-use foundation models;
• the ownership and possession of the model weights of any dual-use foundation models, and the physical and cybersecurity measures taken to protect those model weights;
• the results of any developed dual-use foundation model’s performance in relevant AI;
• red-team testing; and
• other information pertaining to the safety and reliability of dual-use foundation models, or activities or risks that present concerns to U.S. national security.

• U.S. Persons that acquire, develop, or possess a potential large-scale computing cluster must report on the following:
• any acquisition, development, or possession, including the existence and location of these clusters and the amount of total computer power available in each cluster.

The proposed rule defines dual-use foundation AI models as AI trained on broad data; AI that generally uses self-supervision; AI that contains at least tens of billions of parameters; AI that is applicable across a wide range of contexts; and AI that exhibits, or could be easily modified to exhibit, high levels of performance at tasks that pose a serious risk to security, national economic security, or national public health or safety.

Applicable activities involving these AI models that would require reporting are limited to those involving very high computing capabilities: (i) conducting AI model training using more than 10^26 computational (integer/floating point) operations; or (ii) acquiring or developing a computing cluster with machines transitively connected by data center networking of greater than 300 Gbit/s and having a theoretical maximum greater than 10^20 computational (integer/floating point) operations for AI training.

In announcing the proposed rule, the Department of Commerce stressed that it needs the most accurate, up-to-date information when making policy decisions about the international competitiveness of the industrial base and its ability to support the national defense. The proposed rule follows a pilot survey program conducted by BIS earlier this year, BIS’s Industrial Base Survey, and would amend that process to align with the new quarterly reporting requirements. BIS is soliciting comments on the proposed rule, due October 22, 2024.