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I argue that facial recognition artificial intelligence (AI) enhances the autocratic state’s coercive capacity while neutralizing mass and elite threats. Drawing on nearly 2 million public procurement contracts and
repression event data from China, I find that small and medium enterprises are the major supplier of surveillance technology to both local and central governments. Empirically, I show that (1) localities that acquire more facial recognition technology, resort less to violent repression, thus substituting the use of hard repression with AI; (2) Firms that supply this technology receive preferential treatment
in commercial courts. Results have wider implications for the functioning of modern-day autocracy as increased AI procurement may address the moral hazard in authoritarian security
by reducing reliance on security forces for repression and outsourcing surveillance to AI.