U.S. authorities monitor AI chip components to avert transfer to China
In a bid to enforce U.S. export controls on advanced AI chips, particularly aimed at preventing these technologies from being illegally diverted to countries like China, U.S. authorities have reportedly been placing location trackers on certain shipments from companies such as Nvidia, AMD, Dell, and Super Micro.
The agencies responsible for this operation are believed to include the Department of Commerce’s Bureau of Industry and Security (BIS), Homeland Security Investigations (HSI), and the FBI. While the exact stage and individuals physically placing the trackers remain unknown, these federal agencies coordinate the operation to monitor shipments and gather evidence against individuals and companies involved in smuggling or illegal diversion.
The Bureau of Industry and Security (BIS) leads efforts to enforce U.S. export restrictions, particularly aimed at preventing advanced AI chips from being illegally diverted. Homeland Security Investigations (HSI) provides investigative support to track down violations of export rules, helping to monitor shipments and gather evidence. The Federal Bureau of Investigation (FBI) assists in enforcement and intelligence gathering related to export control violations, supporting successful prosecution or interdiction efforts.
The trackers, which vary in size from small devices to about the size of a smartphone, are typically concealed within the packaging or inside the servers themselves. They are used only on select shipments already under investigation, helping authorities monitor whether these shipments end up in prohibited destinations under U.S. export controls, especially targeting China to curb its access to advanced American semiconductor technology.
In January, Reuters reported that the U.S. had traced organized AI chip smuggling to China via countries such as Malaysia, Singapore, and the UAE. A shipment of Dell servers containing Nvidia chips had large trackers attached to the box in an unspecified year. The trackers have been found in shipments of Nvidia and AMD chips, with five other people in the AI server supply chain aware of the use of trackers in servers from manufacturers like Dell and Super Micro, including chips from Nvidia and AMD.
However, Dell has stated that it is not aware of a U.S. Government initiative to place trackers in its product shipments. Super Micro has declined to disclose its security practices when asked about the use of trackers. Chinese authorities have urged local companies to avoid using Nvidia’s H20 chips, particularly for government-related purposes.
It is not known when the U.S. started tracking semiconductor shipments or how often trackers have been used. The sources do not know who placed the trackers or at what stage of the process. Chinese authorities have stated that they have ample supply of domestic chips to meet their needs and do not rely on American chips for government operations.
The use of trackers in semiconductor shipments shows the lengths authorities are willing to go to enforce these restrictions, aligning with U.S. policies since 2022 restricting such exports. The growing rivalry between the U.S. and China around AI chips is highlighted by the Chinese authorities' statement. No information is provided about Trump's potential approval for Nvidia to resume operations with China.
- The Department of Commerce's Bureau of Industry and Security (BIS) and Homeland Security Investigations (HSI) are involved in the use of trackers on certain semiconductor shipments, primarily aimed at monitoring the diversion of advanced AI chips to countries like China, thereby enforcing U.S. export controls in the realm of technology and politics.
- General-news outlets have reported the use of trackers on shipments from companies such as Nvidia, AMD, Dell, and Super Micro, raising questions about the use of such technology in the supply chain and its potential implications for international finance and diplomacy.
