The Future Ruler of the World?

China Tech Threat’s Future of BIS project is out today with a new paper: “Build an AI Workforce at BIS to Strengthen Controls and Stop Illicit Acquisition of American Artificial Intelligence Technologies”.

AI – which essentially causes machines to perform human-like functions – is one technology that is poised to live up to the hype. Five years ago Russian President Vladimir Putin said “Whoever becomes the leader in this sphere will become the ruler of the world.”

What would make him make such a sweeping statement about something we normally associate with iPhone autocorrect and Netflix recommendations?

In a military context, AI has enormous application for intelligence, surveillance, reconnaissance, logistics, command and control capabilities, lethal autonomous weapons systems, and many other components of warfighting. This matters, as the U.S. National Security Commission on Artificial Intelligence has written, because, “The ability of a machine to perceive, evaluate, and act more quickly and accurately than a human represents a competitive advantage in any field—civilian or military.”

In other words, the battles of tomorrow may very well be won or lost based on which military has the best AI technologies.

Right now the Chinese military is racing to achieve (or sustain) this competitive advantage. The NSCAI report affirms the PRC’s intentions: “China’s plans, resources, and progress should concern all Americans. It is an AI peer in many areas and an AI leader in some applications. We take seriously China’s ambition to surpass the United States as the world’s AI leader within a decade.”

According to a Center for Security and Emerging Technology (CSET) report titled “Harnessed Lightning: How the Chinese Military is Adopting Artificial Intelligence,” released in October 2021, the PLA spends more than $1.6 billion each year on AI-related systems and equipment. CSET went on to note that, based on an analysis of 343 PLA contracts with AI firms, the PLA seems most focused on procuring AI for intelligence analysis, predictive maintenance, information warfare, and navigation and target recognition in autonomous vehicles. And Elsa Kania of the Brookings Institution has written, “While there is currently no direct evidence that the PLA has formally fielded a weapons system fully consistent with the definition of ‘AI weapon,’ a number of systems are analogous or comparable in their functionality.”

It’s one thing to have countries compete against one another for the commanding heights of technology. A Chinese victory would be a catastrophe. Not only would China gain a perhaps decisive military edge over the U.S., but the world has already seen how China has deployed AI for nefarious purposes in the genocide and repression of Uyghur Muslims and other ethnic minorities in the Xinjiang region of western China. More on that and recommendations on the role BIS can play to push back in upcoming posts.

You can read the latest recommendation here.

BIS Agenda Recommendation #3: Strengthen Semiconductor Manufacturing Equipment Restrictions to Stop China’s Self-Sufficiency

Today, China Tech Threat released the third installment in its continuing policy recommendation series intended to help leaders at the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) to prevent adversaries from acquiring and weaponizing sensitive U.S.-made technologies.

Semiconductors are critical to power virtually all forms of modern technology, from everyday devices like smartphones and tables to sophisticated defense systems. Yet, in the wrong hands or wrong applications, U.S.-born semiconductor and semiconductor manufacturing equipment (SME) technology can present a national security risk.

While the United States enjoys a competitive advantage over China in chip design and manufacturing, the People’s Republic of China (PRC) has made self-sufficiency a pillar of its national strategy to dominate the global market. The Chinese government’s success will depend largely on access to American-made chips and SME.

Despite the Biden Administration’s hardline position, including expansion of Entity List designations, China’s semiconductor production increased 33% last year, more than double the growth rate from a year earlier. This owes largely to what the Semiconductor Industry Association (SIA) recently called “a whole-of-nation effort to advance China’s chip sector, including government subsidies, procurement preference and other preferential policies.”

Chinese chipmakers Yangtze Memory Technologies Company (YMTC), ChangXin Memory Technologies (CXMT) and Semiconductor Manufacturing International Corporation (SMIC)—which have been called China’s “national champions”—have largely evaded U.S. export restrictions and continue to steal U.S. technology, despite SMIC being added to the Entity List.

SME is one of the few chokepoints that U.S. policymakers can use to prevent the PRC from surpassing the United States in chip design and production. In fact, the White House’s 100-day supply chain review recommended that the Administration “target and implement export controls on critical semiconductor equipment” to “protect U.S. national security interests by limiting advanced semiconductor capabilities in countries of concern.”

As much as 80% of sophisticated chipmaking and design processes is owned by U.S. companies, Nikkei Asia reported this month. And some critical tools are only made by U.S. companies.   

Yet, American SME makers continue to generate significant profits from sales to China. In November 2020, CNBC’s Jim Cramer predicted that “business is going to very good” for U.S. SME manufacturers Lam Research, KLA Corporation, and Applied Materials. “The China opportunity could be enormous,” he added, referring to these companies’ continued access to Chinese buyers.

Mr. Cramer’s prediction has been a windfall to stockholders. U.S. SME makers far outpaced the S&P 500 index over the past two years (up 33%), with KLA stock increasing 136%, Applied Materials up 126%, and Lam Research up 89%.

These growth trends indicate that U.S. export controls on SME remain largely insufficient to prevent the flow of sensitive technology to Chinese-controlled companies. As U.S. Representative Michael McCaul (R-TX10) cautioned last November: “[U.S. SME makers’] short-term corporate profits are sacrificing long-term American strategic interests. The Administration must use export controls to stop the PRC from further building out its semiconductor supply chain.”

To curb the PRC’s ambitions to dominate the semiconductor industry, China Tech Threat encourages BIS leaders to:

  • Add YMTC and CXMT to the Entity List. Designating bad actors to the Entity List is a powerful way to stop China’s state-owned entities from acquiring sensitive information. Yet, inconsistent application has allowed major Chinese semiconductor manufacturers, like YMTC and CXMT, to operate freely, while restricting others, like SMIC.

Not only does U.S. export control law compel BIS to restrict SME to military end users, putting YMTC and CXMT on the Entity List represents an effective exercise to choke China’s military ambitions and protect Americans.

  • Target “Organizing Forces” with Trade Restrictions. As Martijn Rasser, a Senior Fellow and Director of the Technology and National Security Program at the Center for a New American Security, explained last year: “The Chinese have been very good at creating cutout companies and intermediaries [to circumvent U.S. export controls],” which creates a “game of whack-a-mole” that expends U.S. resources.

BIS should target organizing forces with trade controls, as the Biden Administration did by adding the Chinese Academy of Military Medical Sciences to the Entity List. Doing so will reach beyond individual state-controlled entities and “behind the curtain” to stop the Chinese government and military from stealing U.S.-made technologies.

  • Prioritize Unilateral Controls on U.S. SME. SME provides the PRC and its proxies with the tools to advance the country’s chip design and manufacturing. Yet, creating SME is a highly complex, patented, and expensive process that requires significant human capital and expertise. That provides leverage for U.S. makers to exert monopoly control and prevent other countries from backfilling demand.

While multilateral cooperation is necessary, U.S. policymakers must prioritize a “control-now-cooperate-later” approach with respect to SME. This should not be an “either-or” decision, but instead, a “both-and” approach.

The PRC is not waiting and watching for U.S. policy to be written. It is actively working to advance the country’s indigenous semiconductor capabilities, with the clear goal of disrupting the United States’ leadership in these key sectors. As such, BIS leaders should be laser focused on protecting the United States’ competitive advantage. That must start by prioritizing semiconductors and SME with trade restrictions, strengthening the export control regime and eliminating holes in the framework, and implementing unilateral controls in tandem with broader multilateral efforts.

To read the full recommendation, click here.

As Biden Pushes Congress to Strengthen U.S. Semiconductor Industry, Reports Indicate Divisions on China Policy

As the Biden Administration begins a push on Capitol Hill to bolster U.S. competitiveness against China, Axios reports that a recent dispute among senior advisors may signal disagreement in the White House over trade policy.

With support from Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi, the White House recently urged members of Congress to support legislation that would allocate $250 billion to strengthen U.S. supply chains in key industries, including semiconductors.     

In a speech on January 21, President Biden urged Congress to pass funding to incentivize U.S. chipmakers. “To be able to say, made in Ohio, made in America—what we used to always be able to say 25, 30 years ago—that’s what this is about,” the President said. “At the end of the day, this is about national security, economic security and it’s about jobs.”

The Axios article this week notes that tensions over the White House’s China policy came to a head at a NSC meeting last September, during which U.S. Trade Representative Katherine Tai accused National Security Advisor Jake Sullivan of leaking comments to the media to undermine her agency’s position of whether to investigate Chinese industrial subsidies.  

“The rare window” into personal clashes within the White House “illuminates the tension between the president’s trade and national security advisers about how and when to execute aspects of their China strategy,” the article states.

Despite President Biden’s firm position that China represents the greatest long-term challenge to the U.S., “the Administration’s plan for competing in the region consists of a single 51-word paragraph,” Politico reported on Monday.

The President’s advisors are divided into “three camps,” the article adds. “The result: inaction. Policy options are debated, teed up for release, and then pulled back — a kind of vaporware China economic policy.”

President Biden has largely maintained his predecessor’s hardline approach—including adding more than 50 Chinese companies with ties to the Chinese Communist Party and People’s Liberation Army to the Entity List.

Yet, it is unclear whether the White House has a concerted plan to protect the United States’ competitive advantage in key industries, particularly semiconductor design and manufacturing.

During a China Tech Threat roundtable forum last week, Nazak Nikakhtar, former Assistant Secretary for Industry and Analysis at the U.S. International Trade Administration, said the Administration should be “more aggressive” in applying export controls on sensitive technology.

“Multilateral sounds good. But in practice, it’s not actually effective because of our allies’ different levels of risk tolerance,” Ms. Nikakhtar said. “We should be mindful and respectful of that, and then move forward with what we believe we need to control.”

As it relates to moving forward, it’s also important for key positions within the Administration to be filled. For example, top leaders for the Department of Commerce’s Bureau of Industry and Security (BIS) have not yet been confirmed and will have important voices and roles as it relates to export controls and protecting America’s strategic technologies. We’re following BIS extensively and producing policy recommendations for the incoming leadership. Visit: for more.

Next Recommendation in BIS Agenda Series: Publish Emerging and Foundational Technology Lists

Today, China Tech Threat released the second in a series of policy recommendations meant to help leaders at the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) prevent adversaries from acquiring and weaponizing sensitive U.S.-made technologies.

BIS Agenda Recommendation 2: Within 90 days of starting, the new BIS Director should publish Congress’ required lists of emerging and foundational technologies.

The globalized world enables a relative free movement of goods and services, but this also allows the proliferation of weapons and items to be used for hostile purposes. Countries adopt export controls to manage the distribution of sensitive items to help ensure that people live in a secure environment.

The Bureau of Industry and Security (BIS) at the U.S. Department of Commerce regulates U.S. exports of “dual use” technologies, which have commercial and military applications, and ensures that innovative products and services are not weaponized by adversaries against Americans.

This second installment in the series explores a key policy issue for BIS: the process and efficacy to control new and innovative dual use technologies. Major Congressional reforms adopted in 2018 require BIS to take leadership in an interagency process to identify and report on emerging and foundational technologies in foreign countries to assess what effect export controls imposed on these technologies may have on their development in the United States, and to judge the effectiveness of export controls on limiting the proliferation of emerging and foundational technologies to foreign countries.

BIS’ performance of these tasks has become a matter of controversy and debate, even prompting some observers to suggest that BIS should be moved out of Commerce because it either can’t or won’t fulfill the tasks. Others have argued that the task is difficult because BIS lacks a workable definition of national security and the view that the relevant technologies are already widely available. The Acting BIS Director states that the relevant technologies are already controlled and that it’s impractical to publish such lists.

Ultimately, this paper’s examination leads to the second recommendation for BIS: Within 90 days of assuming office, the new BIS Director should publish Congress’ required lists of restricted emerging and foundational technologies–which at the very least could include updates to their Export Control Classification Numbers (ECCN), if they are already controlled–and maintain publication thereafter to Congress’ required schedule.

Coming Next Week: CTT’s Second Installation in Our Policy Recommendation Series for Incoming BIS Leaders

The second policy recommendation from China Tech Threat to help leaders at the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) prevent adversaries from acquiring and weaponizing sensitive U.S.-made technologies, will be launched next week.

This recommendation explores a key policy issue for BIS: the process and efficacy to control new and innovative dual use technologies. Major Congressional reforms adopted in 2018 require BIS to take leadership in an interagency process to identify and report on emerging and foundational technologies in foreign countries, to assess what effect export controls imposed on these technologies may have on their development in the United States, and to judge the effectiveness of export controls on limiting the proliferation of emerging and foundational technologies to foreign countries.

BIS’ performance of these tasks has become a matter of controversy and debate, even prompting some observers to suggest that BIS should be moved out of Commerce because it either can’t or won’t fulfill the tasks. Alan Estevez himself noted, during his prepared remarks at his nomination hearing, that “if confirmed, I will lead the dedicated professional staff at BIS to ensure that our export controls prevent the transfer of sensitive U.S. technologies. To do that, I will work to ensure that we are appropriately using all the authorities provided under ECRA. As part of that process, I will ensure that we execute our due diligence in identifying and imposing appropriate controls on those emerging and foundational technologies that need protection.” However, the Acting Director of BIS states that the relevant technologies are already controlled and that it’s impractical to publish such lists.

Keep an eye out for this recommendation and more to come as we move further into 2022.

New BIS Director Must Address PRC Increasing Sophistication in Nuke & Space Tech

The Pentagon’s 2021 Report to Congress shows the grimmest picture yet of the military and security developments in the People’s Republic of China (PRC). The PRC has “intelligentized” its military so that it can conduct simultaneous land, air, sea, cyber, and space operations to fight and win wars against a “strong enemy” like the U.S., coerce Taiwan, counter peripheral threats, and project global power. Its development in space is impressive and includes rocket launches, sophisticated satellite operations (including navigation integration with the Belt and Road Initiative to create a “Space Information Corridor”), and testing dual-use technologies for potential counterspace missions. The PRC’s space developments are integrated with hypersonics, including the recent feats of a missile circumnavigating the globe and then reaching a target, as well as spaceplanes. While speaking at the Reagan National Defense Forum (see also CNN, Washington Times), Space Force Gen. David D. Thompson warned of the PRC’s acceleration in the space domain, noting that it is on track to surpass the U.S. in capabilities by 2030.

It took the PRC 37 years to launch its first 100 Long March rockets, but the most recent 100 Long March launches were completed in less than three years, notes With some 40 launches, 2021 is a record-breaking year for the PRC. The expendable Long March rockets are named for the infamous 1934 trek by the Red Army during the Chinese Civil War. The key question is how and why the PRC, after struggling for years, has sudden expertise in space. Is it indigenous development, tech transfer from foreign aerospace firms working in China, theft of critical tech, licensing critical U.S. technologies, or a combination thereof?   

Historically much of the PRC’s space development was undertaken by explicit government agencies. This makes it easy to identify and restrict sales of critical technologies, though the China Aerospace Science and Technology Corporation (CASC) was only added to Bureau of Industry and Security (BIS) Entity List in 2019, along with its aliases the Shanghai Academy of Spaceflight Technology, Shanghai Institute of Space, and the Shanghai Space Tower. Indeed aerospace and propulsion is a long-standing and sizable category in BIS’s Commerce Control List. This includes space launch vehicles, spacecraft, buses, payloads, and on-board systems and equipment, specially designed for spacecraft.

In recent years startups have taken an increasing role in space innovation in the PRC. These entities are more nimble and can fly below the radar of controls meant to restrict technologies from military end users and uses. Recent research by the Center for Security & Emerging Technology showed how hundreds of artificial intelligence startups in the PRC have been able to avoid the BIS tripwire while contributing to the PRC military. It would not be surprising to find the same dynamic in space tech, and this presents an important challenge for the next BIS Director, a position that has been without confirmed leadership for 4 years.

Alan Estevez is the nominee for the position and is considered an interesting choice for his defense, security, and supply chain background. His selection could signal a greater emphasis on security at the agency.

Christian Zur who led the U.S. Chamber of Commerce Procurement and Space Industry Council for more than decade observes, “Few people are as well-positioned as Estevez to step into the BIS position and tackle the enormity of challenges posed by China’s use of U.S. technology for military and space applications. In particular, many Chinese commercial space start-ups maintain ties to governmental entities which only serves to underscore the strategic trade-offs ahead for Estevez should he assume the helm at BIS.”  

Stay tuned for a follow up post with observations from other experts on Estevez’s nomination and the Future of BIS.

BIS Policy Recommendation: Strengthen Export Control Enforcement to Deter Violations

Today, China Tech Threat released the first in a series of policy recommendations meant to help leaders at the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) prevent adversaries from acquiring and weaponizing sensitive U.S.-made technologies.

·       BIS Agenda Recommendation 1: Strengthen Enforcement to Detect, Identify and Deter Export Control Violation

Export controls provide a primary defense to keep sensitive dual-use and emerging technologies out of the hands of adversaries, like the People’s Republic of China (PRC), that seek to apply them against U.S. national security and economic interests. However, the tools to enforce compliance are relatively weak and may not fit the seriousness of threats posed by violators.

Export controls are one of the few frontline defenses to maintain U.S. advantages in key technologies. Yet, it’s unclear how many violations (and violators) authorities may be missing or how well aligned the BIS’ enforcement workforce and penalty regime are.

The next BIS Director should consider increasing export control violation penalties, which he or she has significant leeway to do, up to twice the value of an applicable transaction. The next Director should also consider adding more enforcement officers and tools available to them to better identify, evaluate and deter export control violations.

Penalties for export control violations are determined by the BIS’ Office of Export Enforcement (OEE), which assess the gravity of infractions based on a set of “aggravating factors.” The maximum criminal penalty for willful violations is $1 million and up to 20 years in prison for individuals. The maximum civil penalty is $300,000 or twice the value of the applicable transaction, whichever is greater.

According to the agency’s 2020 Annual Report, BIS investigations produced 36 criminal convictions last year for export control violations. This resulted in just more than $2,141,000 of combined restitutions, forfeitures and fines and 615 months of imprisonment—or less than $60,000 of financial penalties and 15 months of jail time, on average.

The penalty regime was updated in 2016 and codified by the Export Control and Reform Act of 2018—a process that generated an important debate about the structure and level of fines. While fines equal to twice the value of a transaction may seem sufficient to deter potential bad actors, many dual-use items have a low dollar value but can inflict a high level of damage when deployed in military use.

While the BIS is recognized as a critical national security agency, its importance is not duly reflected in the agency’s annual budget. The BIS employs about 450 full-time staff—about a quarter of which are dedicated to enforcement—with a yearly budget of approximately $122 million (compared to the full Commerce Department annual budget, ~$10 billion).

U.S. export control enforcement “by far exceeds all other countries combined,” says Kevin Wolf, former Assistant Secretary of Commerce for Export Administration. Yet, as he has testified before Congress, Mr. Wolf believes greater resources are needed to ensure fairness for companies that act in good faith to comply with BIS restrictions and expand the playing field for legitimate, lawful trade—while still reliably deterring potential violators.

Coming This Week: CTT Launches Policy Recommendation Series for Incoming BIS Leaders

The Department of Commerce’ Bureau of Industry and Security (BIS) is the most important government agency most Americans have never heard of. Responsible for setting export control policies, enforcing treaty compliance and supporting U.S. technological leadership, the BIS plays a key role in maintaining the balance among U.S. innovation, commerce and national security interests.

This once obscure office has taken on a prominent role as the United States’ competition (and tensions) with China has escalated. As Martijn Rasser and Meghan Lamberth penned recently, “As the enforcer of export controls, [BIS] has become ground zero of the technology competition with China… Export controls, investment reviews, and technology trade restrictions are now key levers in national security strategy.”

President Biden has nominated Alan Estevez and Thea Kendler to serve as Under Secretary of Commerce for Industry and Security (BIS Director) and Assistant Secretary for Export Administration, respectively. Collectively, Mr. Estevez and Ms. Kendler bring unparalleled national security experience to BIS at one of the most critical junctures in the agency’s history.

Because the BIS and the U.S. export control regime will be play in a key role in shaping U.S.-China trade policy—and could very well determine the outcome of the United States’ competition with the PRC—China Tech Threat will introduce a series of policy recommendations for BIS and its leadership to focus and strengthen the agency’s agenda, streamline and improve export control policy, and better ensure U.S. national security interests.

China Tech Threat will publish the first paper in the series later this week. Please check back here for more.

BIS Adds 12 Chinese Companies to the Entity List

Last week, the Bureau of Industry and Security (BIS), within the Dept. of Commerce, added a dozen Chinese companies on the Entity List over national security and foreign policy concerns. The action comes as we await confirmation of Alan Estevez to assume leadership of the relatively unknown, but increasingly crucial agency.

One of these companies is semiconductor maker New H3C Technologies (H3C), which is partly owned by U.S. company Hewlett Packard Enterprise. For its 2020 fiscal year, HPE recorded about $737 million in sales to H3C. This is equal to about 3% of total HPE revenues – as well as purchases amounting to roughly $215 million.

Additionally, HPE’s Chinese partner is H3C, Tsinghua Unigroup, which CTT has repeatedly flagged as a supplier of the People’s Liberation Army (PLA). Further Tsinghua Unigroup partially owns Yangtze Memory Technologies Co. (YMTC), which China Tech Threat has also raised, concerns about citing its contribution to the PLA and alarming uses of state subsidies to support espionage and anticompetitive practices against competitors.

While “HPE says the New H3C Semiconductor Technologies subsidiary was set up about two years ago for research-and-development purposes and that it does not conduct business in the US market,” it is yet another sign of dangerous Chinese ties that are spread far and wide in the U.S. market, often without consumers knowledge.

In addition to H3C, there were 11 other Chinese companies added to the Entity List. A press release noted that these entities were being added to the list “as part of the Department of Commerce’s efforts to prevent U.S. emerging technologies from being used for the PRC’s quantum computing efforts that support military applications…these PRC-based technology entities support the military modernization of the People’s Liberation Army and/or acquire and attempt to acquire U.S. origin-items in support of military applications. Today’s action will also restrict exports to PRC producers of electronics that the support the People’s Liberation Army’s military modernization efforts.”

U.S. Secretary of Commerce Raimondo noted: “Global trade and commerce should support peace, prosperity, and good-paying jobs, not national security risks. Today’s actions will help prevent the diversion of U.S. technologies to the PRC’s and Russia’s military advancement…The Department of Commerce is committed to effectively using export controls to protect our national security.”

“This is a sensible move and an important reminder of the scope and scale of China’s efforts to achieve technological breakthroughs that erode US national security,” CNAS’ Martijn Rasser noted. Mr. Rasser has also noted the “strong case” for YMTC to be added to the Federal Communications Commission’s (FCC) Covered List for similar concerns around national security.

China Tech Threat applauds BIS’ action against these dangerous companies and urges that this effort to root out and punish other Chinese companies contributing to the PLA continues and expands to include other key entities, such as YMTC and CXMT, another Chinese semiconductor fab. Without clear action against these companies, the U.S. greatly risks cutting edge technologies being used against us when incorporated in the PRC weaponry.

China’s AI startups face few barriers to buy American tech; BIS, DoD, and Treasury on the sidelines

An explosive new report, Harnessed Lightning: How the Chinese Military Is Adopting Artificial Intelligence, from the Center for Security & Emerging Technology (CSET) is a wake-up call to America’s national security and strategic trade control policymakers. The report demonstrates how thousands of Chinese artificial intelligence (AI) startups can access American technologies, including advanced DRAM semiconductors. Of the 273 AI suppliers to the Chinese military identified in this study, less than two dozen are named in U.S. export control and sanctions regimes, whether the Entity List published by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), the Chinese Military-Industrial Complex Companies List published by the Department of the Treasury’s Office of Foreign Assets Control, or the List of Chinese Military Companies (NDAA Sec. 1260H List). Notably these AI companies may acquire U.S. tech which is subsequently sold and packaged for a military contract under a larger entity such as the Aviation Industry Corporation of China (AVIC) or China Aerospace Science and Technology Corporation (CASC), both restricted by DoD.

More largely the report describes China’s goal to create asymmetric advantage against the U.S. in the Indo-Pacific, to develop systems to jam and blind U.S. sensor and information networks and the country’s military-civil fusion (军民融合) development strategy to acquire the technology to fulfill these goals. A typical AI startup is founded by STEM graduates from a leading Chinese university, headquartered in a commercialization enclave or government-run innovation, engaged with researchers at defense-affiliated universities and research laboratories, and in receipt of contracts from the Chinese military, police, state-owned enterprise, or other authority.

From this impressive report, Senators Marco Rubio (R-FL), Tom Cotton (R-AR), Roger Wicker (R-MS), Bill Hagerty (R-TN), and Bill Cassidy (R-LA) wrote to Secretary Gina Raimondo. They asked her to blacklist Chinese AI companies that help arm the People’s Liberation Army. “Despite the pressing need to restrict the PLA’s advancement in key technology areas, our government has done little to impede the flow of U.S. exports and investment to Chinese AI companies with PLA ties,” the senators wrote.

They urged the Secretary to answer the following questions:

  1. If the intelligence community can identify core technologies vital to the United States’ competition with China, why has BIS failed to identify foundational technologies and a comprehensive range of emerging technologies, as required by law?
  2. Why weren’t all of the PLA’s 273 AI suppliers listed in the CSET report already on the Entity List, given that these companies’ ties to the PLA were apparently open-source information?
  3. Now that these PLA AI supplier firms have been identified, will BIS add these Chinese AI companies to the Entity List?

Presently China is dependent on the U.S. for as much as 90 percent of its high-end chips and despite much high-profile policy, it appears that all but a few of the AI startups have difficulty obtaining U.S. equipment, information, and capital. Processors from NVIDIA and Xilinx make their way to restricted entities with military end uses through intermediary companies. Indeed U.S. companies partner on AI-research projects with Chinese businesses that supply the PLA with AI systems and equipment.

The CSET study reviewed publicly available requests for proposals by the Chinese military from April-December 2020, uncovering 343 AI-related equipment contracts, among some 66,000 documents. Contracts ranged in price from $1,300 (RMB 9,000, for an intelligent sound-and-light alarm detection system) to $3 million (RMB 21 million, for an intelligent UAV data access and management platform), with the average of $240,000 (RMB 1.7 million).

We applaud CSET for this incredibly impressive report. This research is formidable in keeping Americans across the country and world, safe. We also urge Secretary Raimondo and the Dept. of Commerce to act swiftly and respond to the Senator’s letter. Using the tools we have, including the power of BIS th

We applaud CSET for this timely and informative report to keep Americans safe. We also urge Secretary Raimondo and the Dept. of Commerce to act swiftly and respond to the Senator’s letter. Using the tools we have, including the power of BIS through export controls, we can mitigate the serious risk that the PLA and Chinese technology present to the privacy and security of the United States, but we must act now.