Practical steps to end chip smuggling
In the AI race between the US and China, compute is the fuel, and smuggled chips feed it directly. They also undermine any future compute agreement: treaties rely on shared facts both sides trust, and hidden stockpiles compromise that baseline before talks begin. Refuse to sell, and middle countries fuel China’s chip industry; sell freely, and supply the smugglers. The controls aren’t too strict or too loose. They’re too crude.
Every chip ships with a sealed, tamper-respondent guarantee processor — the flexHEG — that enforces a signed compute budget, counting down as the chip runs. Renewing it takes a cryptographic signature from an authorized party. No signature, no compute. If someone smuggles a chip with this technology, it soon becomes a brick. Regulators can size those budgets so exported chips serve business and consumer needs but stay below frontier-training scale. The chip never reports what you run: no models, no weights, no data.
The Commerce Department can break the stalemate by publishing a license exception under authority it already holds: chips with certified hardware guarantees earn standing, streamlined export to markets now capped or reviewed one deal at a time, while ungoverned chips keep today’s restrictions. The mechanism exists only as prototypes, and that is the point: the rule gives chipmakers a reason to build governed silicon — an expanded market and recurring licensing revenue. The standard adapts published flexHEG and RAND designs, certified by independent evaluators as BIS already requires. None of this needs new law: regulators can write the rule in months; the first governed silicon ships in roughly three years, and coverage compounds with every generation after.
A trade-in program can swap the millions of ungoverned GPUs already fielded for discounted governed chips, shrinking the pool that can walk across borders.
Load-bearing assumptions remain — tamper resistance against state-level adversaries, middle countries’ preference for American compute, chipmakers’ trust in a durable rule, credible key governance — and time sharpens each one.
After a capability jump or a warning shot, a US-China agreement to slow down is not out of the picture. Such an agreement lives or dies on verification: every FLOP traceable to an agreed budget. This plan builds that accounting now, while it’s feasible, so the mechanism exists when it’s needed most.