Since 2019, U.S. export controls have restricted Chinese firms like Huawei from accessing advanced semiconductor chips and production equipment to curb China's technological and military progress. In response, Chinese Premier has called for accelerated application of scientific and technological achievements amid these export restrictions. Despite U.S. efforts to slow China's AI development through semiconductor export controls, Chinese companies have innovated by improving efficiency, stockpiling strategic equipment, and advancing domestic manufacturing, achieving comparable AI training results with smaller computing clusters. Meanwhile, David Sacks, the White House AI czar under the Trump administration, has downplayed the risk that American AI chips could be smuggled to unauthorized actors, warning that overly strict U.S. AI regulations might hinder growth and allow China to dominate the market. However, a recent report by the Institute for Applied Computational Science and the Center for a New American Security highlights that smuggling could become the primary method for Chinese AI companies to obtain chips, suggesting that cracking down on smuggling would be crucial to limiting China's AI ambitions.