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Title page 1

Contents 4

Acknowledgements 2

Executive Summary 5

Collecting Detailed Data on AI Chip Smuggling Is Difficult Under Existing Laws 8

Large Volumes of AI Chips Are Likely Being Smuggled into the PRC 8

Why Does AI Chip Smuggling Occur? 14

Better Enforcement Can Curtail AI Chip Smuggling 16

Recommendations 19

Conclusion 29

Appendix A: Methodology 30

Appendix B: Additions to the Export Administration Regulations for an AI Chip Notification Requirement 32

Figures 9

Figure 1. Which Chips Are AI Developers in Different Countries Using? 9

Figure 2. A Summary of AI Chip Smuggling Cases Uncovered by Journalistic Investigations 11

Figure 3. Export-Controlled AI Chip Listings on Chinese Online Marketplaces 12

Figure 4. Probabilistic Model of AI Chip Smuggling to the PRC in 2024 13

Figure 5. Estimates of AI Compute Acquired by the PRC in 2024 14

Figure 6. Resources Available to BIS vs AI Chip Smugglers 15

Figure 7. The AI Chip Smuggling Chain 17

Figure 8. Overview of Proposed Recommendations 20

Figure 9. Enhanced Due Diligence Measures for AI Chip Exports 22

Figure 10. Useful Data Attributes for AI Chip Notification Requirements 24

Figure 11. Bureau of Industry and Security: Total Budget and Budget for Export Enforcement 28