Tag: export controls

You Can’t Prosecute Smuggling NVIDIA chips to CCP and Authorize Sales to CCP at the Same Time

The Trump administration is attempting an impossible contradiction: selling advanced NVIDIA AI chips to China while the Department of Justice prosecutes criminal cases for smuggling the exact same chips into China.

According to the DOJ:

“Operation Gatekeeper has exposed a sophisticated smuggling network that threatens our Nation’s security by funneling cutting-edge AI technology to those who would use it against American interests,” said Ganjei. “These chips are the building blocks of 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. The Southern District of Texas will aggressively prosecute anyone who attempts to compromise America’s technological edge.”

That divergence from the prosecutors is not industrial policy. That is incoherence. But mostly it’s just bad advice, likely coming from White House AI Czar David Sacks, Mr. Trump’s South African AI policy advisor who may have a hard time getting a security clearance in the first place..

On one hand, DOJ is rightly bringing cases over the illegal diversion of restricted AI chips—recognizing that these processors are strategic technologies with direct national-security implications. On the other hand, the White House is signaling that access to those same chips is negotiable, subject to licensing workarounds, regulatory carve-outs, or political discretion.

You cannot treat a technology as contraband in federal court and as a commercial export in the West Wing.

Pick one.

AI Chips Are Not Consumer Electronics

The United States does not sell China F-35 fighter jets. We do not sell Patriot missile systems. We do not sell advanced avionics platforms and then act surprised when they show up embedded in military infrastructure. High-end AI accelerators are in the same category.

NVIDIA’s most advanced chips are not merely commercial products. They are general-purpose intelligence infrastructure or what China calls military-civil fusion. They train surveillance systems, military logistics platforms, cyber-offensive tools, and models capable of operating autonomous weapons and battlefield decision-making pipelines with no human in the loop.

If DOJ treats the smuggling of these chips into China as a serious federal crime—and it should—there is no coherent justification for authorizing their sale through executive discretion. Except, of course, money, or in Mr. Sacks case, more money.

Fully Autonomous Weapons—and Selling the Rope

China does not need U.S. chips to build consumer AI. It wants them for military acceleration.Advanced NVIDIA AI chips are not just about chatbots or recommendation engines. They are the backbone of fully autonomous weapons systems—autonomous targeting, swarm coordination, battlefield logistics, and decision-support models that compress the kill chain beyond meaningful human control.

There is an old warning attributed to Vladimir Lenin—that capitalists would sell the rope by which they would later be hanged. Apocryphal or not, it captures this moment with uncomfortable precision.

If NVIDIA chips are powerful enough to underpin autonomous weapons systems for allied militaries, they are powerful enough to underpin autonomous weapons systems for adversaries like China. Trump’s own National Security Strategy statement clearly says previous U.S. elites made “mistaken” assumptions about China such as the famous one that letting China into the WTO would integrate Beijing into the famous rules-based international order. Trump tells us that instead China “got rich and powerful” and used this against us, and goes on to describe the CCP’s well known predatory subsidies, unfair trade, IP theft, industrial espionage, supply-chain leverage, and fentanyl precursor exports as threats the U.S. must “end.” By selling them the most advanced AI chips?

Western governments and investors simultaneously back domestic autonomous-weapons firms—such as Europe-based Helsing, supported by Spotify CEO Daniel Ek—explicitly building AI-enabled munitions for allied defense. That makes exporting equivalent enabling infrastructure to a strategic competitor indefensible.

The AI Moratorium Makes This Worse, Not Better

This contradiction unfolds alongside a proposed federal AI moratorium executive order originating with Mr. Sacks and Adam Thierer of Google’s R Street Institute that would preempt state-level AI protections.
States are told AI is too consequential for local regulation, yet the federal government is prepared to license exports of AI’s core infrastructure abroad.

If AI is too dangerous for states to regulate, it is too dangerous to export. Preemption at home combined with permissiveness abroad is not leadership. It is capture.

This Is What Policy Capture Looks Like

The common thread is not national security. It is Silicon Valley access. David Sacks and others in the AI–VC orbit argue that AI regulation threatens U.S. competitiveness while remaining silent on where the chips go and how they are used.

When DOJ prosecutes smugglers while the White House authorizes exports, the public is entitled to ask whose interests are actually being served. Advisory roles that blur public power and private investment cannot coexist with credible national-security policymaking particularly when the advisor may not even be able to get a US national security clearance unless the President blesses it.

A Line Has to Be Drawn

If a technology is so sensitive that its unauthorized transfer justifies prosecution, its authorized transfer should be prohibited absent extraordinary national interest. AI accelerators meet that test.

Until the administration can articulate a coherent justification for exporting these capabilities to China, the answer should be no. Not licensed. Not delayed. Not cosmetically restricted.

And if that position conflicts with Silicon Valley advisers who view this as a growth opportunity, they should return to where they belong. The fact that the US is getting 25% of the deal (which i bet never finds its way into America’s general account), means nothing except confirming Lenin’s joke about selling the rope to hang ourselves, you know, kind of like TikTok.

David Sacks should go back to Silicon Valley.

This is not venture capital. This is our national security and he’s selling it like rope.

Uncle Sugar, the Lord of War: Drones, Data, and Don’t Be Evil

“You know who’s going to inherit the Earth? Arms dealers. Because everyone else is too busy killing each other.”

The Lord of War, Screenplay by Andrew Niccol

Aren’t you glad that we allowed YouTube to jack us around, let Google distribute pirate tracks and sell advertising to pirate sites? Oh, and don’t forget allowing Google to scan all the world’s books–good thing they’re not using any of that to train AI. All thanks to Google’s former CEO Eric Schmidt, aka Uncle Sugar.

This week, Ukraine’s Office of the President announced a strategic partnership with Swift Beat, an AI drone technology company reportedly linked to Eric Schmidt who is showing up everywhere like a latter day Zelig. Yes, that’s right–your Uncle Sugar is back. The Ukraine memorandum of understanding adds yet another layer to the quiet convergence of Silicon Valley money and 21st century warfare that is looking to be Uncle Sugar’s sweet spot. Given that Ukraine depends on the United States to fund roughly half of its defense budget, it’s a fairly safe assumption that somehow, some way, Uncle Sugar’s Washington buddies are helping to fund this deal.

The President of Ukraine’s announcement says that “[Swift Beat] will produce interceptor drones for the Armed Forces of Ukraine to destroy Russian UAVs and missiles, quadcopters for reconnaissance, surveillance, fire adjustment, and logistics, as well as medium-class strike drones for engaging enemy targets.” All based on US intel. So if Swift Beat uses US money received by Ukraine to manufacture this kit, you don’t suppose that Uncle Sugar might be planning on selling it to the good old US of A at some point in the future? Particularly given that the Russia-Ukraine war is frequently cited as a proving ground for the AI driven battle space?

Swift Beat has been portrayed as a nimble startup positioned to bring real-time battlefield intelligence and autonomous drone operations to Ukraine’s army. But as Defence-UA reported, the company’s website is opaque, its corporate structure elusive, and its origins murky. Despite the gravity of the deal—delivering critical defense technology to a country in a kinetic war—Swift Beat appears to lack a documented track record, a history of defense contracting, or even a clear business address. Reporting suggests that Swift Beat is owned by Volya Robotics OÜ, registered in Tallinn, Estonia, with Eric Schmidt as the sole beneficiary. Yeah, that’s the kind of rock solid pedigree I want from someone manufacturing a weapon system to defend my capitol.

Defence-UA raises further questions: why did Ukraine partner with a new firm (apparently founded in 2023) whose founders are tightly linked to U.S. defense tech circles, but whose public presence is nearly nonexistent? What role, if any, did Eric Schmidt’s extensive political and financial connections play in sealing the agreement? Is this a case of wartime innovation at speed—or something more…shall we say…complicated?

The entire arrangement feels eerily familiar. Nicholas Cage’s character in *Lord of War* wasn’t just trafficking weapons—he was selling access, power, and plausible deniability. Substitute advanced AI for Kalashnikovs and you get a contemporary upgrade to the AI bubble: an ecosystem where elite technologists and financiers claim to be “helping,” while building opaque commercial networks through jurisdictions with far less oversight that your uncle would have back home in the US. Cage’s arms dealer character had swagger, but also cover. You know, babes dig the drone. Not that Uncle Sugar would know anything about that angle. Schmidt’s Swift Beat seems to be playing a similar game to Yuri Orlov—with more money, but no less ambiguity.

And this isn’t Schmidt’s first dance in this space. As readers will recall, his growing entanglement in defense procurement, battlefield innovation, and AI-powered surveillance raises not just ethical questions—but geopolitical ones. The revolving door between Big Tech and government has never spun faster, and now it’s air-dropping influence into actual war zones.

Dr. Sarah Myers West of the AI Now Institute warns that figures like Eric Schmidt—who bridge Big Tech and national security—are crafting frameworks that sideline accountability in favor of accelerated deployment. That critique lands squarely in the case of Swift Beat, whose shadowy profile and deep ties to Silicon Valley make it a case study in how defense contracts and contractors can be opaque and deeply unaccountable. And Swift Beat is definitely a company that Dr. West calls “Eric Schmidt adjacent.”

While no public allegations have been made, the unusual structure of the Swift Beat–Ukraine agreement—paired with the company’s lack of operational history and the involvement of high-profile U.S. individuals—may raise important questions under the Foreign Corrupt Practices Act (FCPA). The FCPA prohibits U.S. entities from offering anything of value to foreign officials to secure business advantages, directly or indirectly. When so-far unaudited wartime procurement contracts are awarded through opaque processes and international actors operate through newly formed entities…dare I say “cutouts”–the risk of FCPA violations needs to be explored. In other words, if Google were to get in to the military hardware business like Meta, there would be an employee revolt at the Googleplex. But if they do it through a trusted source, even one over yonder way across the river, well…what’s the evil in helping an old friend? The whole thing sounds pretty spooky.

As Ukraine deepens its relationships with U.S. technology suppliers, and as prominent U.S. investors and executives like Uncle Sugar increase their involvement with all of the above, it may be appropriate for U.S. oversight bodies to take a closer look—not as a condemnation, but in service of transparency, compliance, and public trust. You know, don’t be evil.