Establishment of Reporting Requirements for the Development of Advanced Artificial Intelligence Models and Computing Clusters, 73612-73617 [2024-20529]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 89, Number 176 (Wednesday, September 11, 2024)]
[Proposed Rules]
[Pages 73612-73617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20529]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 702

[Docket No. 240905-0231]
RIN 0694-AJ55


Establishment of Reporting Requirements for the Development of 
Advanced Artificial Intelligence Models and Computing Clusters

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Proposed rule; request for comment

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SUMMARY: This proposed rule would amend the Bureau of Industry and 
Security's (BIS) Industrial Base Surveys--Data Collections regulations 
by establishing reporting requirements for the development of advanced 
artificial intelligence (AI) models and computing clusters under the 
Executive order of October 30, 2023, ``Safe, Secure, and Trustworthy 
Development and Use of Artificial Intelligence.''

DATES: Comments on this proposed rule must be received by BIS by no 
later than October 11, 2024.

ADDRESSES: Comments on this proposed rule may be submitted to the 
Federal rulemaking portal (www.regulations.gov). The regulations.gov ID 
for this proposed rule is: BIS-2024-0047. Please refer to RIN 0694-AJ55 
in all comments.
    Anyone submitting business confidential information should clearly 
identify any business confidential portion of a comment at the time of 
submission, file a statement justifying nondisclosure and referring to 
the specific legal authority claimed, and provide a non-confidential 
version of the submission.
    For comments submitted electronically containing business 
confidential information, the file name of the business confidential 
version should begin with the characters ``BC.'' Any page containing 
business confidential information must be clearly marked ``BUSINESS 
CONFIDENTIAL'' on the top of that page. The corresponding non-
confidential version of those comments must be clearly marked 
``PUBLIC.'' The file name of the non-confidential version should begin 
with the character ``P.'' Any submissions with file names that do not 
begin with either a ``BC'' or a ``P'' will be assumed to be public and 
will be made publicly available through https://www.regulations.gov. 
Commenters submitting business confidential information are encouraged 
to scan a hard copy of the non-confidential version to create an image 
of the file, rather than submitting a digital copy with redactions 
applied, to avoid inadvertent redaction errors which could enable the 
public to read business confidential information.

FOR FURTHER INFORMATION CONTACT: Sean Delehanty, Office of Strategic 
Industries and Economic Security Bureau of Industry and Security, 
Department of Commerce. Phone: 202-316-5765; Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Background

    Section 4.2(a)(i) of Executive Order 14110 of October 30, 2023, 
``Safe, Secure, and Trustworthy Development and Use of Artificial 
Intelligence'' (E.O. 14110), directs the Secretary of Commerce to 
require companies developing, or demonstrating an intent to develop, 
potential dual-use foundation AI models to provide certain information 
to the Federal Government on an ongoing basis. Additionally, section 
4.2(a)(ii) of E.O. 14110 directs the Secretary of Commerce to require 
companies, individuals, or other organizations or entities that 
acquire, develop, or possess a potential large-scale computing cluster 
to report any such acquisition, development, or possession, including 
the existence and location of these clusters and the amount of total 
computing power available in each cluster.
    As defined under E.O. 14110, a ``dual-use foundation model'' is 
``trained on broad data; generally uses self-supervision; contains at 
least tens of billions of parameters; is applicable across a wide range 
of contexts; and 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, national public health or safety, 
or any combination of those matters.'' The reporting requirements 
proposed in this regulation are intended to apply to dual-use 
foundation models that meet technical conditions issued by the 
Department. The Department expects to update the technical conditions, 
based on technological advancements, as

[[Page 73613]]

necessary and appropriate, as directed by section 4.2(b) of E.O. 14110.
    E.O. 14110 directs the Department of Commerce (Department) to 
collect information about dual-use foundation models in accordance with 
the Defense Production Act (DPA) (50 U.S.C. 4501 et seq.). Under the 
DPA, the President is authorized to take actions that ensure the U.S. 
industrial base is prepared to supply products and services to support 
the national defense. In this context, the term ``national defense'' 
means ``programs for military and energy production or construction, 
military or critical infrastructure assistance to any foreign nation, 
homeland security, stockpiling, space, and any directly related 
activity'' (50 U.S.C. 4552(14)). Additionally, the DPA makes clear that 
the international competitiveness of the U.S. industrial base directly 
affects its ability to support the national defense (see 50 U.S.C. 
4502(a)(7)).
    Among other authorities, the DPA authorizes the President ``by 
regulation, subpoena, or otherwise, to obtain such information from, 
require such reports and the keeping of such records by, make such 
inspection of the books, records, and other writings, premises or 
property of, and take the sworn testimony of, and administer oaths and 
affirmations to, any person as may be necessary or appropriate, in his 
discretion, to the enforcement or the administration of'' the DPA (50 
U.S.C. 4555(a)). The DPA further specifies that this grant of authority 
``includes the authority to obtain information in order to perform 
industry studies assessing the capabilities of the United States 
industrial base to support the national defense'' (50 U.S.C. 4555(a)).
    To carry out its obligations under section 4.2(a) of E.O. 14110, 
BIS is exercising its DPA authority, which was delegated to the 
Department by the President in Executive Order 13603, and subsequently 
re-delegated within the Department to BIS, to collect information from 
U.S. companies that are developing, have plans to develop, or have the 
computing hardware necessary to develop dual-use foundation models. AI 
models are quickly becoming integral to numerous U.S. industries that 
are essential to the national defense. For example, manufacturers of 
military equipment (e.g., aircrafts, tanks, and missile launchers) use 
AI models to enhance the maneuverability, accuracy, and efficiency of 
equipment.\1\ Similarly, manufacturers of signal intelligence devices 
(e.g., satellites, cameras, and radar) use AI models to improve how 
those devices capture signals and eliminate noise.\2\ As a final 
example, developers of cybersecurity software, which can be applied to 
protect a wide range of systems and infrastructure that are critical to 
the national defense, use AI models to increase the speed at which that 
software detects and responds to cyberattacks.\3\
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    \1\ Shield AI, ``Shield AI Conducts AI-Piloted Flights on Sixth 
Aircraft, the Kratos MQM-178 Firejet'' (Mar. 29, 2024), https://shield.ai/shield-ai-conducts-ai-piloted-flights-on-sixth-aircraft-the-kratos-mqm-178-firejet/; RTX, ``Raytheon Technologies Unveils 
Next-Generation Electro-Optical Intelligent-Sensing Capability (Apr. 
24, 2023), https://www.rtx.com/news/news-center/2023/04/24/raytheon-technologies-unveils-next-generation-electro-optical-intelligent-sensing.
    \2\ National Instruments, ``Artificial Intelligence in Software-
Defined SIGINT Systems'' (Feb. 6, 2024), https://www.ni.com/en/solutions/aerospace-defense/radar-electronic-warfare-sigint/artificial-intelligence-in-software-defined-sigint-systems.html; 
Northrop Grumman, ``Artificial Intelligence Helps Protect Troops in 
Denied GPS Environments'', https://www.northropgrumman.com/what-we-do/artificial-intelligence-helps-protect-troops-in-denied-gps-environments.
    \3\ NVIDIA, ``NVIDIA and Booz Allen Hamilton Expand Partnership 
to Bring AI-Enabled Cybersecurity to Public and Private Sectors'' 
(Sept. 20, 2022), https://nvidianews.nvidia.com/news/nvidia-and-booz-allen-hamilton-expand-partnership-to-bring-ai-enabled-cybersecurity-to-public-and-private-sectors; IBM, ``AI and 
Automation for Cybersecurity'' (June 2022), https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/ai-cybersecurity.
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    Dual-use foundation models could increase the capabilities of these 
products and services to an even greater extent. Specifically, 
integrating dual-use foundation models into products like military 
equipment, signal intelligence devices, and cybersecurity software 
could enable those products to operate more effectively across a wider 
range of environments, to respond more effectively to unexpected 
signals, and to combat additional types of cyberattacks.
    Given those potential capabilities, it is essential to the national 
defense that the defense industrial base is able to integrate dual-use 
foundation models. Indeed, because industries and governments across 
the world are actively working to integrate dual-use foundation models 
into their defense capabilities, the U.S. defense industrial base will 
need to integrate dual-use foundation models to remain internationally 
competitive.
    Accordingly, the U.S. Government must be ready to take actions that 
ensure dual-use foundation models produced by U.S. companies are 
available to the defense industrial base. To do so, the U.S. Government 
needs information about how many U.S. companies are developing, have 
plans to develop, or have the computing hardware necessary to develop 
dual-use foundation models, as well as information about the 
characteristics of dual-use foundation models under development. Such 
information will allow the U.S. Government to determine whether action 
is necessary to stimulate development of dual-use foundation models or 
to support the development of specific types of models.
    The integration of AI models into the defense industrial base also 
requires the U.S. Government to take actions as needed to ensure that 
dual-use foundation models operate in a safe and reliable manner. 
Products integrating these models may operate in unpredictable or 
unreliable ways, potentially resulting in dangerous accidents, and a 
lack of reliability will make it difficult for the U.S. Government to 
use those products in contexts where the margin for error is small, 
including defense-related activities where accidents could result in 
injury or even loss of life. Thus, the U.S. Government needs 
information about how companies developing dual-use foundation models 
are training those models to respond to different kinds of inputs and 
information about how those companies have tested the safety and 
reliability of their models. Such information will allow the U.S. 
Government to determine the extent to which certain dual-use foundation 
models can be used by the defense industrial base and whether action is 
needed to ensure that the defense industrial base produces the safest 
and most reliable products and services in the world.
    For similar reasons, the U.S. Government must minimize the 
vulnerability of dual-use foundation models to cyberattacks. Dual-use 
foundation models can potentially be disabled or manipulated by hostile 
actors, and it will be difficult for the U.S. Government to rely on a 
particular model unless it can determine that the model is robust 
against such attacks. Accordingly, the U.S. Government needs 
information about the cybersecurity measures that companies developing 
dual-use foundation models use to protect those models, as well as 
information about those companies' cybersecurity resources and 
practices. Under 15 CFR 702.3 all information submitted to the 
Department under this rule will be treated as confidential and afforded 
all the protections of section 705(d) of the DPA. Such information will 
allow the U.S. Government to determine which models are secure enough 
to be integrated into products or services that are essential to the 
national defense and to assess whether action is needed to ensure that 
the defense

[[Page 73614]]

industrial base is producing the most secure products and services in 
the world.
    Finally, the U.S. Government must prepare the defense industrial 
base for the possibility that foreign adversaries or non-state actors 
will use dual-use foundation models for activities that threaten the 
national defense, including to develop weapons and other dangerous 
technologies. Accordingly, the U.S. Government requires information 
about the safety and reliability of AI models, including any 
potentially dangerous capabilities that developers of dual-use 
foundation models have identified with respect to those models. This 
includes the results of tests related to reliability as well as the 
results of any red-team testing that the company has conducted relating 
to lowering the barrier to entry for the development, acquisition, and 
use of biological, weapons by non-state actors; the discovery of 
software vulnerabilities and development of associated exploits; the 
use of software or tools to influence real or virtual events; and the 
possibility for self-replication or propagation. Such information will 
enable the U.S. Government to determine whether investments in the 
defense industrial base are needed to ensure the United States has 
access to safe and reliable AI systems, as well as to counteract the 
dangerous capabilities identified or to ensure that adequate safeguards 
are in place to prevent the theft or misuse of dual-use foundation 
models by foreign adversaries or non-state actors.
    In short, dual-use foundation models will likely drive significant 
advances in numerous industries on which the national defense depends. 
These advances require BIS to conduct an ongoing assessment of the AI 
industry to ensure that the U.S. Government has 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.
    Section 4.2(a)(i) of E.O. 14110 mandates that the Secretary shall 
require companies developing dual-use foundation AI models to provide 
information, reports, or records regarding the following:
    1. 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;
    2. 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; and
    3. 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.
    4. 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.
    Section 4.2(a)(ii) of E.O. 14110 also mandates that companies, 
individuals, or other organizations or entities that acquire, develop, 
or possess a potential large-scale computing cluster must report any 
such acquisition, development, or possession, including the existence 
and location of these clusters and the amount of total computing power 
available in each cluster. To the extent that these entities are 
companies developing dual-use foundation models, they are also subject 
to obligations 1-3, above.

Discussion of the Proposed Rule

    This proposed rule outlines a potential notification and reporting 
process for companies developing or intending to develop dual-use 
foundation AI models and for companies, individuals or other 
organizations or entities that acquire, develop, or possess computing 
clusters that meet technical conditions issued by the Department. Such 
entities would be required to report the required information to the 
BIS on a quarterly basis for activities that occurred during that 
quarter or that are planned to occur in the six months following the 
quarter.
    BIS collected information responsive to the requirements of section 
4.2(a) of E.O. 14110 via a mandatory survey of companies identified as 
developing or planning to develop potential dual-use foundation models. 
That survey was issued on January 26, 2024. Under this proposed rule, 
companies that completed the survey and any other companies that have 
developed or are in the process of developing dual-use foundation 
models or large-scale computing clusters would be required to submit 
information about these activities on a quarterly basis.
    For companies that have already submitted complete information via 
the survey, the reporting requirements will not require that the 
company report activity already reported to BIS in the survey but would 
require the reporting of any additions, updates, or changes to the 
information since the survey. Any company that has filed at least one 
report would be required to continue to file reports on a quarterly 
basis for as long as it continues to meet the reporting requirements 
or, if it no longer meet the requirements, until it has filed seven 
quarterly reports affirming that it has no additions, updates, or 
changes to the information in the last report. The reporting system 
will allow for companies that have no additions, updates, or changes 
since the last report to make a simple notification to that effect.

Request for Comments

    BIS welcomes public comment on all aspects of this proposed 
regulation. While much of the information that entities must report is 
dictated by section 4.2(a) of E.O. 14110, BIS is particularly 
interested in public comments on the following:
    1. Quarterly Notification Schedule: BIS has proposed that all 
covered U.S. persons with models or clusters exceeding the technical 
thresholds for reporting should notify BIS on a quarterly basis. 
Covered U.S. persons would be required to make quarterly notifications 
of `applicable activities' that meet the criteria under Sec.  
702.7(a)(1)(i) or (ii) planned to occur in the next six months related 
to dual-use foundation models and/or computing clusters, as well as 
quarterly notifications required for any `applicable activities' (i.e., 
an ``applicable activity'' that meets the criteria under Sec.  
702.7(a)(1)(i) or (ii)) and Sec.  702.7(a)(2)(v) (Affirmation of no 
applicable activities), as applicable. `Applicable activities' are 
defined to include developing, or having the intent to develop within 
the next six months, an AI model or computing cluster above certain 
technical thresholds specific in this proposed rule. If a covered U.S. 
person has any `applicable activities' to report, then they will notify 
BIS, and BIS will follow up with more detailed questions, to which the 
Covered U.S. person must respond within 30 calendar days. If Covered 
U.S. persons have no `applicable activities' to report, they would only 
be required to affirm that fact to BIS each quarter. BIS has proposed a 
quarterly notification schedule to provide the U.S. Government with 
timely information on the safety and security of large AI models and 
computing clusters, while offering a regular notification schedule to 
facilitate respondent planning and ease respondent burden. BIS welcomes 
comments on the frequency of the proposed notification schedule, as 
well

[[Page 73615]]

as alternatives for achieving timely reporting of the required 
information.
    2. Collection and Storage: BIS recognizes that the information 
collected through these reporting requirements is extremely sensitive. 
In the interest of gathering information on prioritizing the safety of 
respondents' data, BIS welcomes comments related to how this data 
should be collected and stored.
    3. Collection Thresholds: BIS has included the technical conditions 
specified in E.O. 14110 for models and computing clusters that would 
trigger the proposed reporting requirements. As directed by section 
4.2(b) of E.O. 14110, BIS will update these technical conditions as 
appropriate. In addition to the technical parameters in E.O. 14110, BIS 
is also seeking comments on the following proposed updated collection 
parameters. BIS welcomes comments on the following sets of technical 
parameters.
     A dual-use foundation model training run triggers 
reporting requirements if it utilizes more than 10[supcaret]26 
computational operations (e.g., integer or floating-point operations). 
Models trained on primarily biological sequence data, but at the lower 
threshold of 10[supcaret]23 computational operations, as specified by 
section 4.2(b) of E.O. 14110, will be addressed in a separate survey.
     Large-scale computing clusters are defined as clusters 
having a set of machines transitively connected by networking of over 
300 Gbit/s and having a theoretical maximum performance greater than 
10[supcaret]20 computational operations (e.g., integer or floating-
point operations) per second (OP/s) for AI training, without sparsity.

Rulemaking Requirements

    1. This proposed rule has been determined to be a significant 
regulatory action for purposes of E.O. 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.) (PRA), unless that collection of information displays a currently 
valid Office of Management and Budget (OMB) Control Number. This 
proposed rule involves a currently approved information collection 
National Security and Critical Technology Assessments of the US 
Industrial Base (OMB Control Number 0694-0119). The authority for this 
collection is section 705 of the Defense Production Act of 1950, as 
amended and related Executive Orders 12656 and 13603. Under this 
information collection, BIS conducts surveys and assessments of 
critical U.S. industrial sectors and technologies. Undertaken at the 
request of various policy, research and development, and program and 
planning organizations within the Department of Defense and the Armed 
Services, Department of Homeland Security (DHS), National Aeronautics 
and Space Administration (NASA), and other agencies, BIS research, data 
collection and analysis provide needed information to benchmark 
industry performance and raise awareness of diminishing manufacturing 
capabilities.
    Most surveys include questions necessary to obtain data on 
employment, supply chain, financial performance, production, technology 
and service capabilities, research and development (R&D), investment, 
competitive outlook, export controls and other relevant information. 
Some surveys include a few non-standard questions, depending on the 
industry and the needs of the partner agency. The number of surveys 
required per assessment varies with the size of the sector and the 
scope of the project.
    Information gathered from these surveys is deemed business 
confidential and will be treated in accordance with section 705 of the 
Defense Production Act of 1950 which prohibits the publication or 
disclosure of such information unless the President determines that its 
withholding is contrary to the national defense. To review previous 
surveys cleared under this generic collection--including all background 
materials--please visit at https://www.reginfo.gov/public/do/PRAMain 
and use the search function to enter either the title of the collection 
or the OMB Control Number.
    When this proposed rule is finalized, BIS intends to use this 
existing information collection for the collection/reporting 
requirement required by E.O. 14110. BIS estimates the specific survey 
required by this proposed rule will have an estimated burden of 5,000 
hours per year aggregated across all new respondents. BIS believes this 
increase in respondent burden does not require a change to the burden 
or cost estimates for the overall umbrella clearance. Please see the 
request for comment section of the proposed rule for more information 
the potential information collection elements BIS is considering for 
the final rule and subsequent surveys.
    3. These proposed changes do not contain policies with federalism 
implications as that term is defined in E.O. 13132.
    4. The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (5 U.S.C. 
601 et seq.) generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to the notice and comment 
rulemaking requirements under the Administrative Procedure Act (5 
U.S.C. 553) or any other statute. Under section 605(b) of the RFA, 
however, if the head of an agency certifies that a rule will not have a 
significant impact on a substantial number of small entities, the 
statute does not require the agency to prepare a regulatory flexibility 
analysis. Pursuant to section 605(b), the Chief Counsel for Regulation, 
Department of Commerce, certified to the Chief Counsel for Regulation, 
Small Business Administration that this proposed rule will not have a 
significant impact on a substantial number of small entities for the 
reasons explained below. No other law requires such an analysis. 
Consequently, no regulatory flexibility analysis is required, and none 
has been prepared.

Number of Small Entities

    Small entities include small businesses, small organizations, and 
small governmental jurisdictions. For purposes of assessing the impacts 
of this proposed rule on small entities, a small business, as described 
in the Small Business Administration's Table of Small Business Size 
Standards Matched to North American Industry Classification System 
(NAICS) Codes (effective March 17, 2023), has a maximum annual revenue 
of $47 million and a maximum of 1,500 employees (for some business 
categories, these numbers are lower). A small governmental jurisdiction 
is a government of a city, town, school district or special district 
with a population of less than 50,000. A small organization is any not-
for-profit enterprise which is independently owned and operated and is 
not dominant in its field. The most apt code to apply here is NAICS 
518--Computing Infrastructure Providers, Data Processing, Web Hosting, 
and Related Services.
    The reporting requirements in this proposed rule are expected to 
apply to only a small number of entities--only those companies 
developing or intending to develop a dual-use foundation model and 
those companies, individuals, or other organizations or entities that 
acquire, develop, or possess potential large-scale computing clusters. 
For the purposes of this rulemaking, the term ``covered U.S. persons'' 
includes

[[Page 73616]]

all U.S. persons subject to the reporting requirements of E.O. 14110, 
section 4.2(a), and is defined as any individual U.S. citizen, any 
lawful permanent resident of the United States as defined by the 
Immigration and Nationality Act, any entity--including organizations, 
companies, and corporations--organized under the laws of the United 
States or any jurisdiction within the United States (including foreign 
branches), or any person (individual) located in the United States. At 
present, BIS assesses that there are between zero and 15 companies 
exceed the reporting thresholds for models and computing clusters at 
the time of publication. All of these entities are well-resourced 
technology companies. Exceeding the technical thresholds for models and 
computing clusters requires access to vast computing power, which is 
not typically available to small entities. The minimum computational 
threshold that would trigger a reporting requirement established in 
E.O. 14110 currently exceeds all or virtually all models in use.\4\
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    \4\ Rahman, Owen, and You. ``Tracking Large-Scale AI Models'' 
(April 5, 2024), https://epochai.org/blog/tracking-large-scale-ai-models.
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    As AI technology development and implementation are expected to 
advance over the next few years, the number of covered U.S. persons 
involved in it will also increase. However, as directed by E.O. 14110, 
the Secretary will update the technical conditions that trigger the 
reporting requirements over time, which may limit the number of 
additional impacted entities over time.

Impact

    For the reasons discussed above, BIS believes that this proposed 
rule, which would impose reporting requirements on large technology 
companies, would have no significant impact on small entities.

Conclusion

    BIS believes that the overall impact of this proposed rule on small 
entities would not be significant, as it would only apply to entities 
with large monetary and computational resources, which BIS believes are 
not small entities. For the reasons set forth above, the Chief Counsel 
for Regulations at the Department of Commerce has certified that this 
action would not have a significant impact on a substantial number of 
small entities.
    In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed 
rule may be found at www.regulations.gov. The regulations.gov ID for 
this proposed rule is: BIS-2024-0047.

List of Subjects in 15 CFR Part 702

    Business and industry, Confidential business information, 
Employment, National defense, Penalties, Research, Science and 
technology.

    Accordingly, 15 CFR part 702 is proposed to be amended as follows:

PART 702--INDUSTRIAL BASE SURVEYS--DATA COLLECTIONS

0
1. The authority citation for 15 CFR part 702 is revised to read as 
follows:

    Authority: 50 U.S.C. 4501 et seq.; E.O. 13603, 77 FR 16651, 3 
CFR, 2012 Comp., p. 225; E.O. 14110, 88 FR 75191, 3 CFR, 2023 Comp., 
p. 657.

0
2. Section 702.7 is added to read as follows:


Sec.  702.7  Special requirements for on-going reporting regarding the 
development of advanced artificial intelligence models and computing 
clusters.

    (a) Reporting requirements. (1) Covered U.S. persons are required 
to submit a notification to the Department by emailing 
[email protected] on a quarterly basis as defined in paragraph 
(a)(2) of this section if the covered U.S. person engages in, or plans, 
within six months, to engage in `applicable activities,' defined as 
follows:
    (i) Conducting any AI model training run using more than 
10[supcaret]26 computational operations (e.g., integer or floating-
point operations); or
    (ii) 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 300 Gbit/s and having a 
theoretical maximum greater than 10[supcaret]20 computational 
operations (e.g., integer or floating-point operations) per second (OP/
s) for AI training, without sparsity.
    Note 1 to paragraph (a)(1): Consistent with industry conventions, 
one multiply-accumulate computation, D = A x B + C, should be counted 
as two operations.
    (2) Timing of notifications and response to BIS questions--(i) 
Notification of applicable activities. Covered U.S. persons subject to 
the reporting requirements in paragraph (a)(1) of this section must 
notify BIS of `applicable activities' via email each quarter, 
identifying any `applicable activities' planned in the six months 
following notification. Quarterly notification dates are as follows: 
Q1--April 15; Q2--July 15; Q3--October 15; Q4--January 15. For example, 
in a notification due on April 15, a covered U.S. person should include 
all activities planned until October 15 of the same year.
    (ii) Response to BIS questions. Following a notification of 
`applicable activities' by a covered U.S. person, the covered U.S. 
person will receive questions from BIS. The covered U.S. person must 
respond to all questions within 30 calendar days of receiving the 
request.
    (iii) Corrections. If any notification of `applicable activities' 
or response to BIS questions filed under this section is incomplete 
when filed, BIS will notify the covered U.S. person and require a 
revised resubmission within 14 calendar days after BIS provides notice 
of incompletion. BIS will continue to require revisions within 14 
calendar days of notification if a resubmission remains incomplete.
    (iv) Clarification questions. If, after receipt of responses 
described in paragraph (a)(2)(ii) of this section, BIS has additional 
questions to clarify those responses, the covered U.S. person will 
provide additional responses to such additional questions within seven 
(7) calendar days. If the covered U.S. person needs additional time to 
provide an additional response, it can request an extension from BIS.
    (v) Affirmation of no applicable activities. For each of the seven 
quarters following the quarter covered by a notification of `applicable 
activities,' if the covered U.S. person has no `applicable activities' 
(i.e., an ``applicable activity'' that meets the criteria under 
paragraph (a)(1)(i) or (ii) of this section) to report, they must 
submit an affirmation of no applicable activities by emailing 
[email protected] on the quarterly notification date. If the 
covered U.S. person submits an affirmation of no applicable activities 
for seven consecutive quarters, they need not provide BIS with any 
affirmation thereafter until they have `applicable activities' to 
report.
    (b) Content, form, and manner of response to BIS questions. (1) All 
information submitted under this section shall be filed with BIS in the 
form and manner that BIS will prescribe in instructions sent to the 
covered U.S. person after BIS has received a notification of 
`applicable activities.'
    (2) BIS will send questions to the covered U.S. person which must 
address, but may not be limited to, the following topics:
    (i) 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;
    (ii) The ownership and possession of the model weights of any dual-
use

[[Page 73617]]

foundation models, and the physical and cybersecurity measures taken to 
protect those model weights;
    (iii) 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; and
    (iv) 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.
    (c) Definitions. For purposes of the reports required by paragraph 
(a) of this section, apply the following definitions.
    AI red-teaming means a structured testing effort to find flaws and 
vulnerabilities in an AI system, often in a controlled environment and 
in collaboration with developers of AI. In the context of AI, red-
teaming is most often performed by dedicated ``red teams'' that adopt 
adversarial methods to identify flaws and vulnerabilities, such as 
harmful or discriminatory outputs from an AI system, unforeseen or 
undesirable system behaviors, limitations, or potential risks 
associated with the misuse of the system.
    AI model means a component of an information system that implements 
AI technology and uses computational, statistical, or machine-learning 
techniques to produce outputs from a given set of inputs.
    AI system means any data system, software, hardware, application, 
tool, or utility that operates in whole or in part using AI.
    Artificial intelligence or AI has the meaning set forth in 15 
U.S.C. 9401(3).
    Company means a corporation, partnership, association, or any other 
organized group of persons, or legal successor or representative 
thereof. This definition is not limited to commercial or for-profit 
organizations. For example, the term ``any other organized group of 
persons'' may encompass academic institutions, research centers, or any 
group of persons who are organized in some manner. The term 
``corporation'' is not limited to publicly traded corporations or 
corporations that exist for the purpose of making a profit.
    Covered U.S. person means any individual U.S. citizen, lawful 
permanent resident of the United States as defined by the Immigration 
and Nationality Act, entity--including organizations, companies, and 
corporations--organized under the laws of the United States or any 
jurisdiction within the United States (including foreign branches), or 
any person (individual) located in the United States.
    Dual-use foundation model means an AI model that is:
    (i)(A) Trained on broad data;
    (B) Generally uses self-supervision;
    (C) Contains at least tens of billions of parameters;
    (D) Is applicable across a wide range of contexts; and
    (E) Exhibits, or could be easily modified to exhibit, high levels 
of performance at tasks that pose a serious risk to security, national 
economic security, national public health or safety, or any combination 
of those matters, such as by:
    (1) Substantially lowering the barrier of entry for non-experts to 
design, synthesize, acquire, or use chemical, biological, radiological, 
or nuclear (CBRN) weapons;
    (2) Enabling powerful offensive cyber operations through automated 
vulnerability discovery and exploitation against a wide range of 
potential targets of cyberattacks; or
    (3) Permitting the evasion of human control or oversight through 
means of deception or obfuscation.
    (ii) Models meet this definition even if they are provided to end 
users with technical safeguards that attempt to prevent users from 
taking advantage of the relevant unsafe capabilities.
    Knowledge has the meaning set out in 15 CFR 772.1.
    Large-scale computing cluster means a cluster of computing hardware 
that meets the technical thresholds provided by the Department in 
paragraph (a)(1) of this section.
    Model weights means the numerical parameters used in the layers of 
a neural network.
    Training or training run refers to any process by which an AI model 
learns from data using computing power. Training includes but is not 
limited to techniques employed during pre-training like unsupervised 
learning and employed during fine tuning like reinforcement learning 
from human feedback.
    United States (U.S.) includes the 50 states, the District of 
Columbia, Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, 
and the Northern Mariana Islands.

Thea D. Rozman Kendler,
Assistant Secretary for Export Administration.
[FR Doc. 2024-20529 Filed 9-9-24; 8:45 am]
BILLING CODE 3510-JT-P