US Deploys Tracking Devices to Detect Illegal Flow of AI Chips to China

The United States has reportedly introduced a new covert method to identify and disrupt the illicit transfer of advanced artificial intelligence (AI) chips to China – installing tracking devices into selected export shipments. This approach helps determine whether sensitive hardware ends up at banned destinations and represents one of the most aggressive enforcement strategies since 2022, when Washington restricted the export of high-end semiconductors with potential military applications.

How the tracking works The tracking devices are not placed in every shipment – they are used selectively as part of ongoing investigations. The primary targets are servers equipped with AI chips from US hardware manufacturers such as Dell Technologies and Super Micro, containing processors from Nvidia and AMD.

Once installed, the devices transmit location data, allowing US authorities to verify whether goods arrive at their declared destination or are diverted, for example, to mainland China. The technology itself is not new – US law enforcement has used embedded tracking systems for decades in cases involving stolen goods, weapons, or drugs. What’s new is the target: AI chips.

Legislative pressure and industry reaction According to reports from Washington, the White House and Congress are considering requiring chipmakers to integrate location verification technology directly into their products to prevent exports to blacklisted countries. China has sharply criticized such measures, calling them “economic coercion” and warning that they could serve as “backdoors” for espionage. China’s cyberspace regulator even summoned Nvidia over the issue.

Nvidia has publicly denied that its chips contain any such access points, but the episode underscores the deepening technological distrust between the US and China. For US companies, the practice carries reputational risks – hardware manufacturers and logistics providers are often not informed in advance that a shipment contains tracking devices, in order to maintain operational secrecy.

Smugglers adapt US authorities are also stepping up pressure on smuggling networks that move AI chips into China via third countries such as Malaysia, Singapore, and Vietnam. In a recent Justice Department complaint, alleged smugglers were found instructing associates to “check for tracking devices” before redirecting servers – a sign that awareness of these methods is spreading among intermediaries. Recently, two Chinese nationals were arrested in the US, accused of exporting millions of dollars’ worth of AI chips to China in more than 20 separate shipments.

Long-term goal: permanent monitoring system The combination of legislative proposals and operational measures indicates that the US is moving toward a permanent location verification system for sensitive exports. Washington is making it clear that it is determined to prevent high-performance AI hardware from ending up in the hands of the Chinese military or surveillance apparatus.

#usa , #china , #AI , #worldnews , #NVIDIA

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