The U.S. Can’t Protect Against Threats Hidden in Information Complexity. Accrete has the Solution

February 24, 2023
Insights: Argus for Supply Chain Influence

Despite Black Lists, China Illegally Secures Proprietary Defense-Related U.S. Technology

While the Chinese “spy balloon” recently generated global media headlines, there is a more prevalent and dangerous threat to U.S. national security through Chinese state-owned entities’ illegal efforts to purchase semiconductors and microchips for atomic and military weapons development. An example of this was recently featured in the Wall Street Journal, which reported that China’s top nuclear weapons lab secured American computer chips nearly two decades after a ban that was put in place to prevent the use of any U.S. products for atomic weapons research by foreign powers.

The buyer of these chips was China’s Academy of Engineering Physics (CAEP), which was put on the Entity List in 1997 by the U.S. Department of Commerce's Bureau of Industry and Security. The Entity List includes entities engaged in "activities sanctioned by the State Department and activities contrary to U.S. national security and/or foreign policy interests." CAEP was put on this list because of its research on ICF (a critical technology in thermonuclear weapon manufacture), nuclear stockpile maintenance, and similar affiliated activities. This kind of research requires the powerful microprocessors and semiconductors produced by Intel Corp. and Nvidia Corp, all of which CAEP was not supposed to be able to purchase. Despite this, CAEP was able to secure these chips at least a dozen times over the last two and a half years.

A Complex Global Supply Chain Challenge

It is not publicly known how the microchips were procured, but in a world with increasingly complex supply chains, it is very challenging to determine the identity of the end user once a good is sold. Also, according to the Bureau of Industry and Security, approximately 600 Chinese entities are on the Entity List. Given the number of companies and duplicitous strategies of hiding behind multiple phantom shell companies means that despite U.S. regulations, companies involved in activities that threaten the national security or foreign policy interests of the U.S. can secure sensitive technologies and components.

There is a critical need to increase transparency and visibility throughout the supply chain. In addition to working more closely with partners and suppliers to ensure they are following appropriate security protocols and taking steps to mitigate any potential risks, the optimal solution is to implement tracking systems and other technologies that enable manufacturers to monitor the movement of their products and ensure they are being used for legitimate and allowable purposes. 

Accrete’s AI Technology Finds Anomalies Humans Miss 

Given the scale and complexity of the internet, the supply chain challenge can only be solved through innovative technologies like Accrete’s AI solution Argus which generates insights captured from continuously analyzing the open source web to identify and predict anomalous and nefarious behavior. Argus automatically extracts, normalizes, and maps relationships between entities, models influence, and surfaces behavioral anomalies indicative of potentially illicit activity that are too complex for humans to identify. 

Moreover, users can interact naturally with Argus’ insight engine and knowledge base via a natural language multi-modal chat-based interface (see Argus chat in action) and gain mission-critical domain-specific insights with attribution and explainability in seconds. 


NVIDIA has a large presence in China, and its products can be found in many other firms that partner with Chinese state-affiliated institutions. In addition to obtaining semiconductors on the open market, the China Academy of Engineering Physics also has several indirect links to companies, including NVIDIA and Intel, through its partner institutions. Similarly, Cadence Design Systems has customers such as the Institute of Computing Technology, an arm of the Chinese Academy of Sciences (CAS). In turn, CAS is responsible for a wide range of sectors that support China’s military-civil fusion strategy, as noted by Argus. The network of entities, color-coded by their respective industries, and their business relationships are visible in the Argus influence module above. 

While U.S. regulation is robust, due diligence, monitoring, and enforcement can be complex and challenging, Argus offers a powerful way to find insight among the multitude of fine-grain data to enable the government and its suppliers to identify political influence over suppliers, export control violations, prohibited suppliers, and more. Without the right solution, analysts will continue to struggle to identify threats and risks in a timely fashion.

Accrete is a commercial dual-use AI company licensing solutions that help bolster national security to customers like the U.S. Department of Defense. As U.S. companies increasingly rely on global supply chains, it's more important than ever to be aware of potential risks and take action. Learn how Argus can help Enterprises protect their supply chain from foreign threats and get ahead of the curve.

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