Select Committee Investigation Reveals China's History of AI Chip Smuggling and Model Distillation

April 16, 2026
Press Release

Today, the Select Committee on China released a new investigation, Buy What It Can, Steal What It Must: China's Campaign to Acquire Frontier AI Capabilities, detailing how China uses legal and illegal means to build its own semiconductor production and the development of artificial intelligence.

"Artificial intelligence sits at the center of U.S.-China competition, and both governments treat leadership in AI as a national security priority," the investigation writes.

"Beijing wants control of the full AI stack, not just competitive applications," it continues. "Beijing is pursuing that autonomy to strengthen its military, harden itself against foreign pressure, and keep the technologies underpinning future economic and military power under Party-state control."

During the investigation, the committee found that China:

  • Remains the largest market for chipmaking equipment despite restrictions.
  • Lawfully procures large volumes of advanced AI chips.
  • Utilizes sophisticated smuggling networks to acquire restricted AI chips.
  • Extracts frontier capabilities from American AI developers through industrial-scale fraud.

The investigation concludes that America and its allies still control key chokepoints that will dictate China’s AI potential. It also makes several policy recommendations, including:

  • Passing the MATCH Act (H.R. 8170), which would require the State Department and the Commerce Department to first seek aligned restrictions with U.S. allies and then close any remaining gaps on their own through foreign direct product rules, minimum U.S.-content thresholds, or end-use controls.
  • Passing the AI OVERWATCH Act (H.R. 6875) to require export licenses for advanced AI chips destined for countries of concern, replacing the current review process with affirmative government oversight of the most consequential transactions.
  • Passing the SCALE Act to set export limits based on China’s own production capacity. This prevents China from importing advanced American AI chips when it has no at-scale alternative.
  • Passing the Remote Access Security Act (H.R. 2683) to give BIS the authority to restrict cloud access in the same way that it controls exports, which would simplify the implementation of cloud restrictions.

Read the full report here.