Bill Drexel, a Fellow at the Hudson Institute, said that the Chip Security Act is designed to prevent China from acquiring American chips. These chips are reportedly used in artificial intelligence (AI) systems that bolster China's military and surveillance capabilities. Drexel's comments were shared with Federal Newswire.
"We have numerous reports of successful smuggling of banned chips on the part of China, and the Act basically wants to force chip companies to make it more possible to track chips that might be smuggled or tampered with," said Drexel. "These chips are most important for China's bid to compete with the United States on Large Language Models like those that power ChatGPT and Deepseek, which have tremendous economic value, as well as some national security applications. They are also helpful for other direct military applications, will be used to build out China's techno-authoritarian ecosystem that it uses to oppress minorities and dissenters within the regime. China is also working to export this model of techno-authoritarianism abroad, so the downstream effects of it having unfettered access to cutting edge chips could well be global."
The House Select Committee on the Chinese Communist Party (CCP) has announced its continued support for the Chip Security Act. The act seeks to safeguard the U.S. chip industry and halt the illegal export of chips to China. According to a press release, reports indicate that approximately 140,000 U.S. chips were illicitly transferred to Chinese entities in 2024. The committee expressed concern that these chips could be used by the CCP to appropriate strategic American technology, thereby advancing its "techno-authoritarian vision for the world."
According to the press release, the Chip Security Act would mandate the Department of Commerce to implement location verification measures to ensure advanced AI chips are not redirected to unauthorized destinations. Additionally, it would require American chip manufacturers to report any instances of AI chips being diverted unlawfully. The Department of Commerce would also be tasked with recommending export controls that emphasize security and adaptability while exploring further strategies to prevent theft and misuse of American technology.
Chinese President Xi Jinping reportedly said in 2022 that China must "speed up the development of unmanned, intelligent combat capabilities," as noted by the Center for a New American Security. Beijing is reportedly pursuing AI applications across various military domains such as surveillance, drones, predictive maintenance, electronic warfare, and automated target recognition.
China's application of AI in surveillance has raised human rights concerns, according to Brookings Institution reports. It is alleged that China employs AI surveillance technologies for repressive actions against minority groups like Uyghur and Turkic Muslims through facial recognition systems.
Drexel is recognized as an expert on technology and national security issues at the Hudson Institute, where his research centers on AI competition with China and U.S.-India relations. His previous positions include roles at institutions such as the Center for a New American Security, the American Enterprise Institute, and the United Nations.
