US EMBEDS TRACKERS IN AI CHIP SHIPMENTS TO BLOCK CHINA DIVERSION
In a move to stop advanced AI chips from being smuggled into China, US authorities are secretly embedding location trackers in select shipments. The covert devices—used only in high-risk cases—are placed inside servers from major hardware makers like Dell and Super Micro, which contain Nvidia and AMD AI-optimized chips.
The trackers transmit location data to confirm whether shipments reach their declared destinations or end up in restricted regions like mainland China. While such tracking tech has been used for decades in law enforcement, this is the first time it’s being applied to AI hardware under export controls.
Washington is also weighing legislation to mandate location verification in all high-end chips, despite criticism from China, which calls it “economic coercion” and warns of possible espionage. US firms face reputational risks, as they are often kept in the dark about which shipments are tracked to maintain secrecy.
Smuggling routes through countries like Malaysia, Singapore, and Vietnam remain active, but recent arrests—including two Chinese nationals accused of illegally exporting millions in AI chips—show the crackdown is intensifying. The US appears set on building a permanent, tech-driven system to secure its AI chip supply chain.