Tech Group Asks Congress to Hold Hearing on Illegal Chip Exports to China
The head of a tech policy nonprofit urged the leaders of three congressional committees Aug. 7 to hold a hearing to examine the “large-scale smuggling” of advanced American AI chips into China in violation of U.S. export controls.
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In a letter to the lawmakers, Brad Carson, president of Americans for Responsible Innovation (ARI), cited the recent arrest of two Chinese nationals who are accused of illegally exporting tens of millions of dollars’ worth of advanced AI chips to China, including by first transshipping the semiconductors through Malaysia and Singapore (see 2508050055).
"While the perpetrators of this smuggling operation now face federal criminal charges, their operation represents only a drop in the bucket of the full scope of illegal chip diversion to China," Carson wrote.
The letter noted that a recent news report said that at least $1 billion worth of Nvidia advanced AI chips were smuggled into China earlier this year (see 2507240020). “These chips are critical enablers of AI capabilities with profound national security implications -- including military modernization, surveillance, and cyber operations by adversarial governments.”
Carson said a hearing should explore whether Nvidia knew about the illegal diversion of its chips to China, what measures Nvidia has taken to monitor black-market activity, and what responsibility U.S. companies have to prevent their chips from being funneled to restricted end users.
“Congress has a duty to ensure that U.S. companies are not turning a blind eye to violations of our export laws -- or worse, quietly profiting from them,” he wrote. “A public hearing would help clarify the facts, identify regulatory gaps, and signal that national security cannot be compromised for short-term commercial gain.”
Carson addressed his letter to the chairmen of the Senate Banking Committee, House Foreign Affairs Committee and House Select Committee on China and also included the ranking members of the three panels. The lawmakers had no immediate comment.
An Nvidia spokesperson downplayed concerns that smuggled chips could end up in AI data centers in China. "Trying to cobble together data centers from smuggled products is a nonstarter, both technically and economically,” the spokesperson said in an e-mailed statement. “Data centers are massive and complex systems, making smuggling extremely difficult and risky, and we do not provide any support or repairs for restricted products. Rather than risk using smuggled products, the market will turn to widely available competitors such as Huawei, undercutting U.S. leadership in China and worldwide."