Smuggled chip flows to China now rival a leading US AI lab

The numbers behind the estimates

A new report puts one segment of the smuggled-chip trade at roughly 150,000 H100-equivalent (H100e) units — about a quarter of the previous estimate for all chips smuggled into China by the end of 2025. Drawing on indictments and journalistic investigations, the researchers point to nearly 300,000 H100e that have reached Chinese hands in violation of US export controls. That volume equals roughly a quarter of the computing power China has obtained through legal channels or domestic production, and because a significant share of smuggling goes undetected, the real figure is likely higher.

The uncertainty range and the global benchmark

The model, built on Monte Carlo simulations, yields a 90% confidence interval of 290,000 to 1.6 million H100e by the end of 2025. The median estimate sits at 660,000 H100e — about 3% of global compute inventory — a scale comparable to what xAI, one of the leading US AI labs, held at the time. At the upper bound, most of China's AI compute would have come from smuggling. The researchers stress that the main uncertainty stems from the volume of smuggling that has not been uncovered, and from the question of what portion of chips reported as "diverted" or "missing" actually made it to China.

From targeted limits to a blanket ban

The graduated escalation of export controls created the incentive. Huawei was added to the Commerce Department's Bureau of Industry and Security (BIS) Entity List in 2019. In October 2022, restrictions were imposed on all advanced chips with