On Oct. 18, the American Gem Society’s grading lab, AGS Laboratories, announced that it will close at the end of 2022, with GIA taking over its intellectual property, technology, as well as its Las Vegas location, which it will use as a research facility.

But one piece of intellectual property that GIA will not pick up is AGS’ pioneering cut grade, which has long been the lab’s main selling point. That will remain with the AGS, says CEO Katherine Bodoh.

“The cut grade standard is an AGS standard, not an AGS laboratory standard,” she says. “That will stay with the society. Titleholders are free to use it. The AGS [cut standard] is the standard with the society, but our members are constantly challenging what’s best for the consumer, and that will continue to evolve.”

Starting in January, GIA is offering its customers the option to get digital AGS Ideal Reports for an extra $25. However, GIA will not use AGS’ cut grade but instead its measures of light performance. The AGS Ideal Reports will be available with or without an ASET (Angular Spectrum Evaluation Tool) image.

In the words of the AGS lab’s FAQs:

Is GIA providing the AGS Cut Grade?

No, the AGS Ideal Report is a supplemental Light Performance digital report for qualifying [i.e. D-Z round and fancy-shape] diamonds, utilizing the GIA Cut Grade along with the AGS Light Performance grade.

Is there a laboratory that grades to the AGS standards?

No, once AGS Laboratories closes, there will be no diamond grading laboratory that grades to the AGS Diamond Grading Standards. AGS titleholders can grade to these standards when working with other AGS members.

Of course, GIA has its own cut grade for rounds. However, it doesn’t have a cut grade for fancy shapes, though AGS does currently offers grades for certain cuts.

GIA has been indicating that it wants to develop cut grades for fancy shape diamonds—something it’s talked about in the past but ended up not doing.

This new collaboration will make that more likely, according to GIA’s statement, which says the combined GIA and AGS research teams will work on “light performance research and a science-based fancy cut grade standard.”

Says Bodoh: “The combined AGS-GIA research team will be the best in the industry. I’m excited to see what is going to come.”

The current AGS lab workers will have a “variety of options,” Bodoh says.

“This just happened yesterday, so we don’t know what this decision will be for everyone,” she says. “But in my opinion, there’s no better home for our AGS Laboratories team than GIA. I care deeply about our team and that was a very important part of seeking a collaboration with GIA.”

As far as the transaction itself, both GIA and AGS have declined comment on the financial details, though JCK hears there was a fair bit of money involved.

AGS’ and GIA’s statements both noted that GIA will establish an “endowment to support AGS and [its] membership through educational initiatives,” but it declined to give a dollar amount to that endowment.

Bodoh says the transaction “defies the regular terminology. It’s not a merger or acquisition in the conventional sense, but a mission-driven collaboration. We were born of the same vision. This is about making sure that AGS is able to fulfill its mission and is doing the best that we can for the industry and our members. That’s the intent and the purpose and the goal behind it.”

Both groups are nonprofits and share the same founders, Robert M. Shipley and his wife, Beatrice.

Top: GIA graders in the lab (photo courtesy of GIA)

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