Forward to the Past: Sanctions and Strategic Trade Control in the Age of Algorithms, Semiconductors and Artificial Intelligence
Year: 2026
Type: article
Abstract: This paper analyzes how software and artificial intelligence enhancements, applied throughout the lifecycle of advanced and off-the-shelf semiconductors, enable performance elasticity—allowing standard hardware to achieve enhanced or restricted capabilities, including the development of weaponized variants. We examine how the potential for weaponizing hardware-software synergies is challenging traditional strategic trade controls and arms embargoes. In the Wassenaar Arrangement, the leading nonproliferation regime for conventional arms and dual use technologies, Russia’s obstruction has frustrated the work on necessary controls. We are also discussing how these disruptions and technological advances are exploited by adversarial actors for the illegal transfer of semiconductors to the embargoed Iran, North Korea and Russia. Our research indicates that these illegal transfers are not stopped with the recent shift by the US and EU towards "Know-Your-Product" (KYP) lifecycle governance. Their technical definitions still overlook and underregulate the versatility of the software/AI’s performance elasticity and consequently, their compliance guidance is not proactive.
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7143531544
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