ARI urges congressional chairs to hold hearing on chip smuggling
On Thursday, Americans for Responsible Innovation (ARI) sent a letter urging leaders in Congress to convene a hearing investigating the large-scale smuggling of advanced AI chips into China and examining whether Nvidia took sufficient measures to prevent or report this activity. The new letter follows a recent investigation by the Financial Times, which found that at least $1 billion worth of advanced Nvidia chips made their way into China this year despite U.S. restrictions.
“Advanced chips are critical enablers of AI capabilities with profound national security implications,” said ARI President Brad Carson. “While Nvidia has long claimed that it has found ‘no evidence’ of any chip diversion to China, the scale of smuggling operations, the size and nature of the equipment involved, and the flagrant sale of controlled chips in China all make that claim hard to reconcile. Congress has a duty to ensure that American companies are not turning a blind eye to export control violations undermining our national security.”
Today’s letter asks leaders on the Senate Banking, House Foreign Affairs, and House CCP Committees to investigate questions including: 1) Whether Nvidia had knowledge or visibility into the illegal diversion and resale of its chips to China, 2) What measures Nvidia has taken internally to monitor and track black-market activity, and 3) What responsibility U.S. companies have to prevent their chips from being funneled to restricted end-users.
On Tuesday of this week, the Department of Justice announced the arrest of two people for illegally shipping tens of millions of dollars worth of advanced AI chips to China. According to an affidavit filed with the DOJ’s complaint, the two arrested smugglers launched a shell company to divert chips to China shortly after the U.S. imposed sweeping export controls on advanced AI chips in 2022. As ARI’s letter notes, these shell-company transactions should have triggered several of the red flags published by the Department of Commerce Bureau of Industry and Security, which companies like Nvidia are responsible for noting, investigating, and reporting to authorities.
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Americans for Responsible Innovation (ARI) is a nonprofit organization dedicated to policy advocacy in the public interest, focused on emerging technologies like artificial intelligence (AI). Learn more at ARI.us.