Sharon Squassoni
The Department of Justice recently announced that its Operation Gatekeeper had helped dismantle a smuggling ring that had exported about $160 million worth of integrated circuits (semiconductor chips) to China in a six-month period in 2025. In describing the challenge, the US Attorney Nicholas J. Ganjei for the Southern District of Texas said, “These chips are the building blocks of [artificial intelligence] AI superiority and are integral to modern military applications. The country that controls these chips will control AI technology; the country that controls AI technology will control the future.”
Chips Enforcement Can’t Keep Pace with the Market. If so, the Trump administration should be worried. According to a 2025 Reuters report, nearly $1 billion worth of Nvidia AI chips entered China via black markets between April and July in 2025.
A few days after the arrests in Texas, President Donald Trump rolled back the Biden-era ban on exporting Nvidia’s second-best chip (the Graphics Processing Unit H200) to China. Perhaps he realized that despite significant effort, time, and money spent on enforcement, the administration’s ability to make a dent in chip smuggling has been marginal.
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