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Countering AI Chip Smuggling Has Become a National Security Priority | CNAS
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4/5
High(4)High quality. Established institution or organization with editorial oversight and accountability.
Rating inherited from publication venue: CNAS
Published by the Center for a New American Security (CNAS), this report is relevant for AI governance researchers focused on hardware-level controls, export policy, and the role of compute access in geopolitical AI competition.
Metadata
Importance: 62/100organizational reportanalysis
Summary
This CNAS report examines the growing threat of AI chip smuggling as a national security concern, analyzing how illicit networks circumvent U.S. export controls to acquire advanced semiconductors. It explores enforcement gaps, smuggling methods, and policy recommendations to strengthen controls on advanced AI hardware reaching adversarial actors.
Key Points
- •AI chip smuggling has emerged as a critical national security threat as adversaries seek to acquire restricted semiconductors despite export controls.
- •Illicit networks exploit transshipment routes, shell companies, and front entities to circumvent U.S. and allied export restrictions on advanced chips.
- •Enforcement of chip export controls faces significant challenges including resource constraints, jurisdictional complexity, and rapid evolution of smuggling tactics.
- •Strengthening interagency coordination, improving end-use verification, and expanding allied cooperation are key to closing enforcement gaps.
- •The report situates hardware access controls as a central lever in U.S. AI governance and competition strategy with China.
Cited by 2 pages
| Page | Type | Quality |
|---|---|---|
| US AI Chip Export Controls | Policy | 73.0 |
| MAIM (Mutually Assured AI Malfunction) | Approach | 55.0 |
3 FactBase facts citing this source
| Entity | Property | Value | As Of |
|---|---|---|---|
| Semiconductor Industry Association | Estimated Chip Diversion | 140,000 | Dec 2024 |
| Semiconductor Industry Association | Estimated Chip Diversion | 140,000 | Dec 2024 |
| Institute for AI Policy and Strategy | publication | Countering AI Chip Smuggling (June 2025, joint with CNAS) — estimates 10,000 to several hundred thousand chips smuggled to China in 2024 | Jun 2025 |
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Based on the available evidence, artificial intelligence (AI) chip smuggling has likely been occurring at a scale that significantly undermines U.S. attempts to restrict the People’s Republic of China’s (PRC’s) access to advanced AI. This is indicated by four lines of argument:
1. **Smuggling should be expected based on historical precedent**. The PRC has a long history of smuggling U.S. technology despite export restrictions, which has rarely resulted in criminal or civil penalties.[1](https://www.cnas.org/publications/reports/countering-ai-chip-smuggling-has-become-a-national-security-priority#fn1)
2. **Smuggling of U.S. AI chips is highly incentivized by their superior performance, higher supply, and more mature software ecosystem relative to chips legally available to Chinese AI labs**.[2](https://www.cnas.org/publications/reports/countering-ai-chip-smuggling-has-become-a-national-security-priority#fn2) Based on publicly available data, of the 22 notable models that had been developed exclusively in the PRC by 2025, only two were trained with Chinese chips.[3](https://www.cnas.org/publications/reports/countering-ai-chip-smuggling-has-become-a-national-security-priority#fn3)
3. **Six news outlets have independently reported evidence of large-scale AI chip smuggling, totaling tens to hundreds of thousands of chips smuggled in 2024**. One smuggler reportedly handled an order of for servers containing 2,400 NVIDIA H100s—worth $120 million—to a customer in the PRC.[4](https://www.cnas.org/publications/reports/countering-ai-chip-smuggling-has-become-a-national-security-priority#fn4) Another facilitated an order worth $103 million.[5](https://www.cnas.org/publications/reports/countering-ai-chip-smuggling-has-become-a-national-security-priority#fn5) Singapore authorities arrested three individuals suspected of diverting AI servers worth $390 million.[6](https://www.cnas.org/publications/reports/countering-ai-chip-smuggling-has-become-a-national-security-priority#fn6) Within this reporting, multiple chip resellers and start-ups in the PRC have claimed that gaining access to export-controlled AI chips is straightforward, with one Chinese start-up founder estimating in 2024 that there were more than 100,000 NVIDIA H100s in the PRC.[7](https://www.cnas.org/publications/reports/countering-ai-chip-smuggling-has-become-a-national-security-priority#fn7) Most of the Chinese chip sellers interviewed in these reports confirm that they work with multiple distributors, use shell companies based overseas, and employ simple tactics to avoid detection, such as relabeling shipments as tea or toys.[8](https://www.cnas.org/publications/reports/countering-ai-chip-smuggling-has-become-a-national-security-priority#fn8)
4. **There are many online listings for export-controlled AI chips available for purchase in the PRC.**
The authors conducted a non-exhaustive search of three Chinese online marketplaces and found 132 domestic listings for export-controlled chips, alon
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