Trump AI Adviser Downplays Chip Smuggling Risk, Warns Against Overregulation
White House Artificial Intelligence Adviser David Sacks on Tuesday dismissed concerns that U.S. AI chips could be easily smuggled to adversaries, warning instead that excessive regulation could hinder American innovation and benefit China.
Speaking at the AWS Summit in Washington, Sacks said fears over AI chip smuggling were exaggerated, noting the physical size and weight of the hardware.
“We talk about these chips like they could be smuggled in the back of a briefcase,” Sacks said. “These are server racks that are eight feet tall and weigh two tons. They don’t walk out doors. It's very easy to basically verify that they're where they're supposed to be,”
Sacks’ remarks signalled a shift in the Trump administration’s AI policy, focusing on expanding global markets for U.S. AI chips and models. This contrasts with former President Joe Biden’s approach, which prioritised restricting chip exports to prevent their use in bolstering China’s military capabilities.
Trump has rescinded Biden-era policies, including an executive order aimed at promoting competition and consumer protection in AI, and the AI diffusion rule, which limited the amount of U.S. AI computing power certain countries could access.
“We rescinded that Biden diffusion rule, which made diffusion a bad word,” Sacks said. “Diffusion of our technology should be a good word.”
Last month, the Trump administration and the United Arab Emirates announced plans to build the largest AI campus outside the U.S., reversing Biden’s 2023 restrictions on AI chip shipments to the region.
Sacks criticised those earlier restrictions, saying they risked pushing allies toward China. “What play are we giving them? We’re basically going to push them into the arms of China,” he said.
He warned that if Chinese telecoms giant Huawei’s AI chips became dominant in five years, “that means we lost. We can’t let that happen.”
Sacks also expressed concern over a growing number of state-level bills aimed at regulating AI and the permitting challenges facing companies building data centres.
“I do worry we’re on a trajectory where fear could overtake opportunity and we end up sort of crippling this wonderful progress that we’re seeing,” he said.
He noted that China has made significant progress in AI, citing the Chinese app DeepSeek, which recently gained attention for its advanced and cost-effective model.
“China is not years and years behind us in AI. Maybe they’re three to six months,” Sacks said.
The White House later clarified that Sacks was referring to China’s AI models, while Chinese AI chips remain one to two years behind U.S. technology.
David Sacks says AI chips are too large to be easily smuggled
Trump administration reverses Biden-era AI export restrictions
UAE to build largest AI campus outside U.S. with American support
Source: REUTERS
