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New AI chip export restrictions to be based on 3-tier system — here’s how it works
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Core policy framework: The US government has established a three-tiered system for AI chip exports, creating distinct access levels for different countries and introducing comprehensive controls on AI compute resources.

  • Tier 1 consists of the United States and 18 allied nations, granted the highest level of access to AI technology
  • Tier 2 encompasses most other nations, operating under restricted access parameters
  • Tier 3 includes 23 embargoed nations plus Macau, facing effectively complete restrictions on access

Key regulatory mechanisms: The Validated End User (VEU) framework establishes strict oversight of entities authorized to import AI chips and computing resources.

  • Universal VEUs (UVEUs) are granted to companies headquartered in Tier 1 countries
  • National VEUs (NVEUs) apply to organizations from Tier 1 and 2 countries for specific national deployments
  • Compliance requirements include detailed reporting and restrictions on compute deployment locations

Quantitative restrictions: Specific caps on GPU purchases have been implemented to regulate AI compute access across different jurisdictions.

  • Tier 2 countries are limited to 49,901 H100-equivalent units between 2025-2027
  • Countries aligning with US export controls may qualify for doubled allocation up to 99,802 units
  • A Low Processing Performance Exemption allows up to 1,699 H100 equivalents per customer annually without special licensing

AI model development constraints: Strict controls on AI model training and development aim to maintain technological advantages among allied nations.

  • Frontier models requiring more than 1e26 training FLOPS can only be developed in Tier 1 countries
  • Restrictions apply to fine-tuning processes and synthetic data generation
  • Large model weights are now classified as export-controlled items

Implementation timeline: The regulatory framework includes specific deadlines and accounting measures for compliance.

  • New regulations become effective after a 120-day implementation period
  • All shipments after January 13 count against established caps
  • Companies must adapt existing operations to meet new compliance requirements

Strategic implications: These regulations represent a fundamental shift in global AI development dynamics, potentially creating new centers of AI innovation while restricting others’ access to cutting-edge technology. The success of this framework will largely depend on international cooperation and the ability to enforce these complex restrictions effectively.

2025 AI Diffusion Export Controls – Microsoft Regulatory Capture, Oracle Tears, Impacts Quantified, Model Restrictions

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