Photo Credit: Getty Images
U.S. authorities have discreetly embedded location-tracking devices into certain shipments of advanced artificial intelligence (AI) chips deemed at high risk of being illegally diverted to China, according to sources with direct knowledge of the practice.
The move, which applies only to select shipments under investigation, is intended to identify chips that end up in destinations subject to U.S. export restrictions. Officials say the technology can help build cases against individuals and companies suspected of violating export control laws.
The tracking devices, hidden within packaging or in some cases inside the servers themselves, have been found in shipments from companies such as Dell and Super Micro Computer containing chips from major U.S. suppliers Nvidia and Advanced Micro Devices (AMD). It remains unclear when authorities began using this method or how frequently it is deployed.
While location trackers have been employed for decades in monitoring sensitive exports such as aircraft parts, their use in semiconductor enforcement has grown in recent years as Washington tightened rules on sales of advanced chips to China. The Biden administration has maintained most of the restrictions first introduced in 2022, which were designed to limit Beijing's access to technology that could advance its military capabilities.
China has criticized the curbs and proposals to mandate built-in location verification in chips, calling them politically motivated measures aimed at containing its technological growth. In 2024, the Cyberspace Administration of China summoned Nvidia over concerns about potential "backdoors" in its products, an allegation the company has denied.
Sources in the AI server supply chain report that resellers of restricted chips in China now routinely inspect shipments for tracking devices. In one 2024 case, large trackers were discovered on Dell shipping boxes, while smaller, concealed devices were embedded inside packaging and servers.
The U.S. Department of Commerce's Bureau of Industry and Security, which oversees export controls, is typically involved in such operations, with assistance from Homeland Security Investigations and the FBI. The agencies declined to comment on the matter.
