The US has, in a covert move, reportedly embedded tracking devices in shipments of advanced artificial intelligence (AI) chips destined for China. This high-stakes enforcement tactic is aimed at preventing the illegal diversion of high-end semiconductor tech.
This tracking system sheds light on the extraordinary measures Washington is deploying to uphold its export restrictions while introducing a new level of complexity into the global semiconductor supply chain.
Confirmed by sources who preferred to remain anonymous, the tracking program targets selected shipments containing AI chips from major manufacturers such as Nvidia and AMD. These shipments, often packaged and shipped by companies like Dell and Super Micro, are fitted with location trackers.
The primary purpose of these trackers, these sources say, is to monitor whether AI chips are rerouted to unauthorized destinations like China where US export controls prohibit or restrict the import of certain semiconductor technologies.
The program is reportedly run by a coalition of federal agencies, including the Department of Commerce’s Bureau of Industry and Security, Homeland Security Investigations (HIS), and the Federal Bureau of Investigations (FBI). And some of these tracking operations are conducted with judicial warrants, enabling the use of gathered data in criminal prosecutions that might come out of it.
This covert surveillance is not without precedent. US custom agents have long employed tracking devices to enforce export laws, dating back to a Hughes Aircraft 1985 court case. However, the current scale of the race to develop powerful technology reflects the heightened stakes between the US and China.
Company responses to this revelation are on the denial line. Dell stated it was “not aware of a US Government initiative to place trackers in its product shipments.” While AMD did not say anything to the matter, Nvidia told Reuters, “We don’t install secret tracking devices in our products.”
China has also condemned the tracking program in strong terms. State media outlets, including the official Xinhua news agency, accused the US of transforming the chip trade into a “surveillance game,” and likening Washington tactics to that of a “surveillance empire.” The news agency also warned that if US chips are perceived as Trojan horses for surveillance, international customers will seek alternatives and it will ultimately dampen diplomatic relations.
“Trade flourishes on transparency and the mutual recognition of shared benefits. Instead of competing openly, Washington casts trading partners as rivals to be tripped up or taken down. The result is the corrosion of transparency, trust and global technology cooperation, outcomes Washington then cynically blames on others,” the news agency said. “And it may backfire: if US chips are seen as Trojan horses for surveillance, customers will look elsewhere.”
Chinese authorities have also scrutinized the security of AI chips imported from US manufacturers. Nvidia’s H20 AI chip and AMD’s MI308 AI Chip, which was recently authorized for export under a new licensing deal that requires them to pay the US government a 15% revenue share in China sales, has come under suspicion for potential “backdoor” security risks.
