On September 11, 2024, the Department of Commerce (DOC), Bureau
of Industry and Security (BIS) issued a proposed rule that would place an ongoing
reporting requirement for entities developing, acquiring, or
possessing advanced artificial intelligence (AI) models and
computing clusters. BIS proposed this rule pursuant to Section 4.2
of Executive Order 14110, which directed DOC to require periodic
reports on companies' use, ownership, and development of
dual-foundation models or large-scale computing clusters. The
proposed rule would allow BIS to collect such information regarding
advanced AI systems for the purpose of Industrial Base Surveys, as
authorized under the Defense Production Act.1
The proposed rule would add Section 702.7 to 15 C.F.R. Part 702,
which governs BIS' Industrial Base Surveys. If adopted, the
proposed rule would require a covered U.S. person to submit
quarterly notifications to BIS if the person has engaged in, or
plans to engage in, either of the following "applicable
activities" pertaining to certain advanced AI systems:
- Development of dual-use foundation AI models: conducting any AI model training run using more than 10^26 computational operations (e.g., integer or floating-point operations)
- Development, acquisition, or possession of large-scale computing clusters: acquiring, developing, or coming into possession of a computing cluster that has a set of machines transitively connected by data center networking of greater than 300Gbit/s and having a theoretical maximum greater than 10^20 computational operations (e.g., integer or floating-point operations) per second (OP/s) for AI training, without sparsity
The quarterly notification dates are April 15, July 15, October 15, and January 15. On each notification date, under the proposed rule, a covered U.S. person must notify BIS of all "applicable activities" that took place during the reporting quarter and "applicable activities" that the entity plans to undertake within the six months following the notification date. Upon receiving a notification, BIS will send questions that address topics including, but not limited to, the following:
- Any ongoing or planned activities related to training, developing, or producing dual-use foundation models, including the physical and cybersecurity protections taken to assure the integrity of that training process against sophisticated threats
- 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, including a description of any associated measures the company has taken to meet safety objectives, such as mitigations to improve performance on these red-team tests and strengthen overall model security
- 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
The notifying entity must respond to BIS' questions within
30 calendar days.
If, for the following six months, the covered U.S. person has not
engaged in, or does not plan to engage in, "applicable
activities" as of a quarterly notification date, then the
entity may submit an affirmation of no applicable activities. An
entity that submits such an affirmation for seven consecutive
quarters need not submit further affirmation until it engages in,
or plans to engage in, "applicable activities"
again.
The proposed rule defines "covered U.S. persons" as any
U.S. citizen or lawful permanent resident, companies organized
under the U.S. or a state law, and individuals located within the
United States. BIS explained that entities that completed BIS'
January 26, 2024 survey — targeting companies identified as
developing or planning to develop potential dual-use foundation
models — along with others meeting the criteria of the
proposed rule, "would be required to submit information about
these activities on a quarterly basis." Entities that fail to
submit a quarterly notification regarding the development,
acquisition, or possession of certain advanced AI systems may be
compelled to produce relevant information and/or be subject to
criminal prosecution.2
Interested parties may submit comments by no later than October
11, 2024. BIS has indicated that it is particularly interested in
comments regarding the frequency of the quarterly notification
schedule, as well as the adequacy of the technical parameters
triggering the reporting requirement. Arnold & Porter will
continue to monitor developments in the advanced AI reporting
rule.
Footnotes
1. 50 U.S.C. § 4501 et seq.
2. 15 C.F.R. § 702.5.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
