In a statement shared with news outlets, Nvidia accused Anthropic of telling “tall tales” in a Wednesday blog post that claimed some Chinese smuggler had come up with creative methods to circumvent export controls,” including hiding chips in “prosthetic baby bumps” and packing them “alongside live lobsters.”

“American firms should focus on innovation and rise to the challenge, rather than tell tall tales that large, heavy, and sensitive electronics are somehow smuggled in ‘baby bumps’ or ‘alongside live lobsters,’ ” a spokesperson for Nvidia said.

The Amazon‑backed AI startup had been arguing that strong export controls on AI chips were crucial to maintaining the U.S. advantage in the global AI race and safeguarding national security.

In the briefing note, Anthropic calls for stricter controls not only on the lawful export of AI‑optimized processors, especially Nvidia’s, to certain countries, but also rigorous enforcement against smuggling networks that exploit jurisdictions with laxer rules to funnel those chips into China in violation of U.S. restrictions.

Anthropic’s call for tighter controls could limit Nvidia’s business abroad, hitting the company’s revenue from chip sales.

“Maintaining America’s AI dominance is contingent on America’s continued compute advantage. The Diffusion Framework gives America the opportunity to solidify and grow its global lead in the development and deployment of powerful AI, by preventing China from accessing powerful AI infrastructure and enabling the United States to set the standards for the future of AI technology,” Anthropic wrote in the post.

In response, Nvidia accused the company of trying to “manipulate regulators to capture victory in AI,” leveraging policy to undermine competition.

“China, with half of the world’s AI researchers, has highly capable AI experts at every layer of the AI stack,” the spokesperson said.

A spokesperson for Anthropic told Fortune: “National security is bigger than the interest of any single company. Anthropic stands by its recently filed public submission in support of strong and balanced export controls that help secure America’s lead in infrastructure development and ensure that the values of freedom and democracy shape the future of AI. It’s critical we deal with the well-documented issue of shell companies, smuggling, and other illegal loopholes that ultimately strengthen China’s position.”

Nvidia has urged policymakers to revisit export rules

The Biden‑era “AI Diffusion Rule” is set to come into effect on May 15.

The rules impose worldwide export controls on cutting‑edge AI processors and model parameters to curb advances by competitors such as China in the intensifying AI arms race.

President Donald Trump is said to be considering revisions to these measures.

Nvidia CEO, Jensen Huang, addressed the upcoming rules in a recent meeting with the House Foreign Affairs Committee. Huang discussed the strategic importance of AI as national infrastructure, the need for investing in U.S. manufacturing, and sounded the alarm about Chinese rival Huawei.

“Today, the U.S. semiconductor industry is being pushed out of China, the world’s largest market. On May 15th, if the AI Diffusion Rule comes into effect without significant changes, we will be forced to similarly retreat from the rest of the world,” Huang said.

He urged U.S. policymakers to revisit and refine AI diffusion rules so that America can secure its technologies for national security purposes and remain a global leader in AI.

“We must be clear‑eyed about what is at stake – our absence will not stop demand and competitors like Huawei are already stepping in. Huawei is rapidly scaling efforts to build AI data centers in third countries as part of China’s Digital Silk Road—building global infrastructure and deploying applications that do not align with U.S. norms or values,” he said.