The Cold War History of Export Controls
+ DC Meetup Monday!
We’re having a meetup on Monday in DC. RSVP here!
This edition is brought to you by Pelanor, the AI-powered FinOps startup letting companies make sense of their cloud spend.
Founded by alumni of Israel’s elite cyber intelligence unit, Pelanor untangles the chaos behind nine-figure AWS and Azure bills. Most companies have no idea how their compute spend ties into business outcomes. Pelanor solves this by building a dynamic graph of your cloud environment—tracking which microservices talk to which databases and how AI workloads are actually being used. Even non-technical team members can ask complex questions in plain English and get straight answers:
“What’s driving our OpenAI bill?”
“Which services are talking to unused databases?”
“Where can we save?”
Reach out to founder Matan Mates on LinkedIn or email him directly at matan@pelanor.io.
Oskar Galeev is a PhD researcher at Johns Hopkins SAIS working on AI history and the politics of the US-China tech race. Previously, he was a Yenching Scholar at Peking University and a Winter Fellow at the Centre for the Governance of AI.
Girish Sastry is an independent AI policy researcher specializing in technical aspects of AI governance. Before this, he spent 4 years at OpenAI where he worked on research related to AI misuse, compute governance, and capability evaluations.
Modern computing export restrictions have deep historical roots that extend far beyond recent headlines. Today’s AI chip denials represent just the latest chapter in a decades-old American strategy of technological containment — one that began long before the Biden administration’s AI diffusion framework or the Trump-era Huawei sanctions. This approach of strategically limiting adversaries’ computing capabilities traces back to the earliest days of the Cold War, when computational power first emerged as a geopolitical asset.
The Coordinating Committee for Multilateral Export Controls (CoCom), established in 1949, was America’s immediate response to a Soviet Union newly armed with nuclear capabilities. This American-led multilateral alliance, led by the United States, established a comprehensive technology embargo system. CoCom controlled the export of strategic goods and technologies — particularly computing equipment — that could enhance Soviet military and economic power. More than just a regulatory body, it represented a coordinated Western effort to maintain technological superiority throughout the Cold War. For 45 years, CoCom carefully managed what computing technologies could cross the Iron Curtain. It also unintentionally taught the Soviets to excel at smuggling and reverse-engineering computers.
Chinese and American think tanks alike have drawn parallels between CoCom and the modern Sino-American semiconductor competition. Guided by historical memory, Chinese policy conversations tend to focus on ChinCom, the specialized control system for the PRC. ChinCom had different goals than CoCom — as one CIA memo explained in 1952, “The problem of security controls respecting the China area is significantly different from that respecting the rest of the Soviet bloc”. While CoCom focused on long-term strategic competition with another superpower, ChinCom implied a much stricter punitive embargo as a direct reaction to “Chinese aggression in Korea.” The USA’s current view of China is similar to the perception of the USSR in the 1950s, but back then, the young PRC was not viewed as a geopolitical competitor or a party in the tech Cold War.
CoCom is the single longest case study on the impact of high-tech export controls in geopolitical competition — and for all intents and purposes, it worked. So what lessons can be learned from the history of the CoCom? And how are they likely to guide both the US and Chinese approaches to limiting each others’ compute capabilities?
New Cold War, Same Challenges
The first and most important parallel is the difficulty of enforcement. We often forget just how much the Cold War policy community complained about CoCom simply “not working.” Even though it was a multilateral regime, like today’s US semiconductor controls, it was not based on any treaty or binding agreement. And out of 17 member states of CoCom, only the US imposed re-export controls.
Sample of smuggled mainframes, industrial control computers, and supercomputers (in bold) during the CoCom era:
Throughout its history, CoCom’s effectiveness was reduced by overt non-compliance, differences between individual member nations, the overall secretive regime, and the financial bottom line of tech exporters. The Eastern Bloc was a giant developing market, and tech companies didn’t want to lose access. The export lists themselves often did not make any strategic sense — in the early years, CoCom even prohibited exports of items like typewriters (for an overview of control lists, check the collection by Sam Weiss Evans). But when it came to truly strategic technologies, control evasions were simply overlooked in most cases. Despite the Bruchhausen Semiconductor Smuggling in 1977-1980 and VAX Supercomputer Diversion of 1983, which directly boosted Soviet missile and aerospace design, only one control evasion case led to a strong policy response from the US. That was the Toshiba-Kongsberg case, the main geopolitical tech scandal of the Cold War.
In the early 1980s, the Soviet KGB received computer numerical controls (CNCs) clearly restricted under CoCom from the Japanese Toshiba Machine and Itochu Corporation as well as the Norwegian state-owned Kongsberg Vaapenfabrik Company. The suppliers were even updating and fine-tuning software on the Soviet facilities between 1982 and 1984. For export license purposes, the Norwegian Trade Ministry listed the items as spare parts for a civilian facility, while Japan’s MITI (Ministry of International Trade and Industry) registered the machines as older models not included in CoCom lists. The result was twofold — Soviet submarines got reduced acoustic signatures, increasing their stealth against American anti-submarine warfare capabilities, while the White House went on a punitive campaign, imposing sanctions on the Norwegian supplier and fully banning imports of Toshiba products. These repercussions made the Toshiba-Kongsberg case unique. The harsh consequences were partly motivated by the rising narrative of tech competition with Japan. It was not only the USSR that the American security establishment was worried about, but also about winning the competition against the Japanese tech sector. But the shamelessness of this case also motivated consequences — no effort was made to send the equipment through third countries, like everyone else did.
Soviet techniques for bypassing CoCom1
Despite extensive multilateral coordination under CoCom, enforcement remained its Achilles heel — a challenge that persists in today’s semiconductor controls. As the Heritage Foundation lamented in 1983: «Terrible Fact. To be sure, Washington would not have to control the re-export of U.S. items from its allies if the allies actually were effectively controlling the re-exports. The problem is that they are not».
On the Soviet side, a critical structural problem of technology competition lay not in acquisition but in efficient diffusion and allocation of restricted computing resources — that is, what happened after restricted tech made it through the blockade. Soviet archives reveal a dysfunctional internal competition that severely limited the effectiveness of their technology transfer efforts. Various intelligence departments, ministries, and industrial enterprises routinely competed for the same technological products, often outbidding each other and creating artificial scarcity for domestic users. The same IBM computer would be simultaneously pursued by a truck manufacturing plant, military production facilities, the state tourism operator Intourist, and even the Soviet Olympic Committee. This fragmentation extended to collection channels themselves, with Soviet industrial ministries frequently requesting identical Western computers through multiple intelligence agencies. Such uncoordinated efforts not only wasted resources, but also critically impaired the USSR’s ability to strategically deploy compute.
This pattern of inefficient resource allocation has modern parallels, such as the inefficient stockpiling of GPUs by Chinese companies and local governments, as covered by ChinaTalk. Chinese policy conversations are increasingly focused on this, arguing that the US-led export control regime should be addressed through “Construction of a Unified National Market” 全国统一大市场建设, a policy aiming to coordinate provincial governments to gain leverage over foreign firms and eliminate local protectionism and administrative monopolies. While there are structural similarities to the supply-side restrictions of the CoCom era, China’s effort to streamline resource allocation means those same control strategies might not yield the same results today.
PRC≠USSR
China’s economic leverage creates a formidable counterweight to future export control efforts. Beijing possesses retaliatory capabilities along the semiconductor supply chain in a way the Soviets never did, especially through critical resources like rare earth minerals. More importantly, China actually has an export market. The Soviet Union’s technological autarky meant it never developed computing giants capable of competing globally. Archival evidence shows that Soviet-made computers rarely crossed even Eastern Bloc borders, let alone captured a share of Western markets. And when transistors first revolutionized telecommunications in the 1950s, CoCom had already been established, reinforcing America’s first-mover advantage. Today, the United States faces the much more complex challenge of building a coalition mid-race.
The second critical difference between the political era of CoCom and that of the 2020s lies in access to human capital. Throughout its technological competition with the United States, the USSR was severely constrained by its limited access to international talent, particularly the tacit knowledge transfer from American computer engineers. While exceptions like Joel Barr and Alfred Sarant enabled rare technological breakthroughs, such cases were anomalies rather than the norm. The Soviet Union could not practically implement anything like the Thousand Talents Program (千人计划). By contrast, Chinese recruitment efforts have successfully targeted specialists from companies like ASML and TSMC alongside top graduates from universities worldwide.
The current competition for global STEM talent contrasts sharply with the CoCom era, when the United States served as the unchallenged center of gravity for international technical expertise. In a world where knowledge transfer often proves more valuable than hardware access alone, human resources can play a substantial role in circumventing export restrictions. The US Foreign Direct Product Rule effectively restricts American talent, but any realistic export control framework must also incorporate talent retention.
Three lessons from CoCom
Effective technology denial requires multilateral enforcement.
There may be inherent limitations to a unilateral enforcement of the export control regime. Despite its structural challenges, CoCom at least regularly coordinated the leading technological and manufacturing powers in restricting access to critical technologies for the United States’ strategic adversary — an alignment that does not exist today. Both CSIS and Carnegie suggested that unilateral controls on frontier technologies are ineffective, a point made many times before, including by Eric Hirschhorn, the former head of BIS, who compared it to “damming half the river.”
Tracking and verification systems are a prerequisite to effective enforcement.
Where CoCom frequently failed was its inability to track controlled technologies once they left manufacturer facilities, creating enforcement gaps that were systematically exploited through transshipment, diversion, and falsified end-user declarations. Erich Grunewald and Michael Aird proposed a chip registry idea, noting that “a key problem for AI chip export enforcement is that BIS does not know where exported AI chips are.” Without visibility into the movement and end-use of restricted technologies, even the most comprehensive control frameworks will ultimately collapse under their own enforcement limitations. Implementing something like the chip registry would significantly increase the odds of technology denial achieving the desired effect.
CoCom operated under nearly ideal institutional conditions, and still could not be enforced perfectly.
CoCom was poised for success, operating under an ideologically bifurcated international system with established multilateral coordination structures and decades of institutional development. Despite these favorable conditions, CoCom still struggled. Today’s landscape offers none of these advantages to the US — the world today has incomparably more interconnected trade networks, fragmented alliance structures with competing economic interests, and a technologically sophisticated competitor deeply embedded in semiconductor supply chains. If CoCom’s results were mixed even under optimal containment conditions, expectations for current export control effectiveness should probably be tempered.
Is the glass half-full or half-empty?
CoCom suggests that export control regimes have always faced practical challenges. Perhaps the most significant challenge is reliable enforcement. To the extent that CoCom was successful, it was through the cooperation of other countries in a more multilateral regime. Today, deteriorating alliance cohesion and tariff wars could undermine the verification and enforcement mechanisms necessary for effective controls. As the intelligence leaks and scandals of the Cold War era show, crucial partners like South Korea and the Netherlands did not always have incentives to comply with the US-led tech regime. Today, these partners simultaneously host critical semiconductor infrastructure while also maintaining substantial economic ties with China. In fact, despite export restrictions, TSMC may have already manufactured millions of controlled high-end AI chips for Huawei.
What does this mean for US AI policy? First, policies that improve verification systems and bolster multilateral institution building would be very effective. Verification and compliance measures should address not only chip smuggling but also other potential circumvention methods such as the use and operation of data centers in countries like Malaysia, remote access to large amounts of compute through cloud services, use of TSMC manufacturing, and other avenues to skirt US export controls.
Second, as policymakers navigate the current “chip war,” they should recognize that export controls represent just one element of a comprehensive technology strategy — one that must be balanced against both economic interdependence and the reality that innovation often flourishes in response to constraints. The most sustainable technological advantage will likely come not from restriction alone, but from accelerating domestic innovation while selectively managing the most critical chokepoints in the AI supply chain.
Estimates based on RAND Corporation, National Security and Export Controls (1974), Warren E.
Rhoades, III, COCOM, Technology Transfer and Its Impact on National Security, Monterey, California, Naval Postgraduate School (1989), and H. Wienert & J. Slater, Transfert de technologie entre l’Est et l’Ouest: les aspects commerciaux et économiques, OCDE (1986).
The basic flaw on all this discussion is the idea that the technologically genie, from where all the technical innovation sprouts, is firmly into US hands and control.
But that has not been the case for some time, no?
Starting with the education system, which, in the west is going to the shitters and under Trump, the proces is being accelerated.
As such, good luck with all these "controls" protecting an empty barn.