US Allegedly Tracks AI Chip Shipments to China with Hidden Devices
The United States government has reportedly intensified its efforts to prevent China from acquiring advanced American artificial intelligence chips, with a new strategy involving the covert placement of location tracking devices in certain shipments. This move, detailed in a recent Reuters report citing sources familiar with the policy, underscores Washington’s escalating concerns that Beijing could leverage these powerful semiconductors to bolster its military capabilities and accelerate its domestic chip industry.
According to these sources, the U.S. Department of Commerce’s Bureau of Industry and Security, the nation’s primary export enforcement agency, is “typically involved” in these tracking operations. The Federal Bureau of Investigation (FBI) and Homeland Security Investigations (HSI) may also participate. The tracking devices are allegedly embedded in “targeted shipments” of AI chips, specifically those deemed at “high risk of illegal diversion to China.” The explicit aim is to identify and penalize companies or individuals found to be violating U.S. export controls. The report further indicates that these trackers have been utilized in server shipments from prominent manufacturers such as Dell and Super Micro, which integrate chips produced by leading semiconductor firms AMD and Nvidia.
Nvidia, a key player in the AI chip market, has vehemently denied these allegations. A company spokesperson stated unequivocally, “We don’t install secret tracking devices in our products,” and referred to a recently published company blog post that asserted, “There are no back doors in NVIDIA chips. No kill switches. No spyware. That’s not how trustworthy systems are built — and never will be.”
This alleged escalation comes amidst an ongoing “chip war” between the U.S. and China, a long-standing geopolitical rivalry over semiconductor technology that has gained new urgency with the advent of AI. Nations are now vying for dominance in the rapidly evolving field of generative AI, recognizing its vast potential applications, including critical military uses. The U.S. government has consistently framed its export controls as a measure to safeguard national security, preventing its strategic rival from accessing technology that could give it a military edge. Simultaneously, these controls are also seen as an attempt to impede the growth of China’s indigenous chip manufacturing capabilities.
The practice of embedding surveillance mechanisms within commercial hardware and software exports is not unprecedented for the U.S. government. Revelations from Edward Snowden in 2014, for instance, exposed how the National Security Agency (NSA) had routinely inserted “backdoor surveillance tools” into routers and other computer hardware before their shipment to foreign nations.
However, the Trump administration’s stance on this issue has appeared somewhat contradictory. Despite the intensified efforts to restrict chip access, former President Trump recently indicated a willingness to consider allowing Nvidia to sell a “scaled-down” version of its graphics processing units (GPUs), crucial for AI applications, to China. This mixed messaging highlights the complex interplay of economic interests, national security concerns, and geopolitical strategy that defines the current technological standoff. The alleged use of tracking devices represents a significant, if not entirely new, frontier in this high-stakes struggle for technological supremacy.