The case of Nvidia and the growing risk of AI and corruption

The panelists feared that AI would enable corruption by making it easier to launder money, give bribes, or produce disinformation. Instead, they learned that the corruption of AI did not start inside the technology itself but with its leaders, heads of state, government officials, and tech CEOs, steering the direction of AI governance. As we see today, America’s approach to AI governance, using export controls to regulate the supply of AI and its components, is fueling corruption. We utilize Transparency International’s definition herein– the abuse of entrusted authority for private gain.

I believe that one company, Nvidia, has become the poster child for corruption in the U.S. Last year, the Trump Administration restricted sales of chips to China under U.S. law out of fears that would provide the Chinese military with an advantage or could undermine U.S. leadership in AI. The now former CEO of Nvidia, Jensen Huang, used flattery and donations to influence the Trump Administration’s AI export policies. And in December, Mr. Trump gave Nvidia permission to sell the H200, an older but still powerful A.I. chip, to China, as long as the U.S. government was given a cut of the sales. (Another company AMD also received an exemption). In so doing, the U.S. gained a financial incentive for loosening controls of AI infrastructure to China However, the Congressional Research Service reported that .”Article I, Section 9, Clause 5 of the U.S. Constitution,prohibits the federal imposition of export taxes and duties (not user fees), and 50 U.S.C. §4815(c), which prohibits BIS from collecting fees for considering or issuing export licenses.”

Additionally, last year, Nvidia’s General Counsel, Tim Teter, seemed to interfere in an investigation of Nvidia’s sales to Chinese and Malaysian entities. And now we’ve learned that although senior administration officials such as Commerce Secretary Howard Lutnick were warned about the dangers surrounding Nvidia and its now former CEO, they took no action. This corruption and inaction puts U.S. national security and the American people at risk.

While export controls may be useful and necessary, they are particularly vulnerable to corruption because they sit at the intersection of high-value restricted goods, bureaucratic gatekeeping, in customs, business, and trade policymaking agencies, and complex cross-border supply chains. When governments restrict access to lucrative technologies, including dual use items such as chips or AI, they can create massive financial incentives for bad actors to bribe officials or exploit regulatory blind spots to bypass the rules. Export control systems rely on government officials to issue licenses, classify goods, and clear shipments through customs. This concentration of discretionary power allows corrupt officials to solicit bribes in exchange for faster approvals or looking the other way. At the same time, U.S. agencies struggle to coordinate trade, customs, and anti-corruption efforts, which are controlled by different agencies.

Export controls also create situations of artificial scarcity and high profits, particularly for dual use items such as AI systems. Some buyers may be willing to pay extremely high prices to receive a limited supply of AI services. Not surprisingly, both competitors of Nvidia that produce high speed chips such as Google, and, as well as Open AI, Amazon, Anthropic, and Microsoft—three of Nvidia’s biggest clients—support legislation that would further limit Nvidia’s ability to export chips to China.

Finally, export controls often involve opaque national security exemptions. Because export decisions often involve classified intelligence or sensitive defense deals, licensing and procurement processes frequently lack transparency and accountability. Such situations make it difficult for independent watchdogs to spot irregularities However, the Trump Administration fired many inspector generals in 2025, including at the Department of Commerce, along with antiorruption prosecutors. .

Given these problems, export controls are not the best tool to prevent our adversaries from acquiring advanced AI systems or chips because they present many opportunities for corruption. Yet Politico has reported that it is almost impossible for members of Congress to support loosening export controls. Studies have shown such controls are rarely effective. Hence, Congress should weigh a different approach Morreover, current export control implementation can harm U.S. economic and technological competitiveness. . While there are no easy answers, , the U.S. should work with its Western allies to to manage technology transfers that might threaten our shared security interests

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