New Legislation Aims to Track AI Chip Smuggling

US Lawmaker Proposes Measures to Monitor Nvidia Chips

A US lawmaker plans to introduce legislation in the coming weeks to verify the location of artificial intelligence (AI) chips, particularly those made by Nvidia, after they are sold. This effort, which has garnered bipartisan support, aims to combat the smuggling of Nvidia’s chips into China, violating US export control laws.

Nvidia’s chips are essential for developing AI systems, including chatbots and image generators, as well as more specialized applications, such as those that could assist in creating biological weapons. Both former President Donald Trump and current President Joe Biden have implemented increasingly stricter export controls on Nvidia’s chips to China.

Despite these measures, reports from Reuters and other agencies have documented ongoing flows of these chips into China. Nvidia has claimed it is unable to track its products once sold, raising concerns about national security and compliance.

Technology to Track Chips Already Exists

US Representative Bill Foster, a Democrat from Illinois and a former particle physicist, asserts that the technology to track chips post-sale is readily available. Independent technical experts interviewed by Reuters agree, noting that much of this technology is already integrated into Nvidia’s chips.

Foster plans to draft a bill that will direct US regulators to establish rules in two critical areas: tracking the location of chips to ensure compliance with export control licenses and preventing unauthorized chips from booting up.

Addressing Widespread Smuggling

Foster stated that there are already credible reports of large-scale chip smuggling, some of which have not been disclosed to the public. He emphasized, “This is not an imaginary future problem; it is a problem now.” He warns that the Chinese Communist Party could potentially be using these chips to design weapons or develop artificial general intelligence.

Recent developments, including the emergence of China’s DeepSeek AI systems—built with Nvidia chips that are banned from sale to China—have heightened the urgency of this issue. Prosecutors in Singapore have charged three Chinese nationals with fraud concerning servers alleged to have contained Nvidia chips.

Existing Chip Verification Technologies

While the technology to verify chip locations is not yet widely implemented, it does exist. For instance, Google’s in-house AI chips are tracked across its vast data centers for security purposes, indicating that this capability could be leveraged more broadly.

Foster’s proposed legislation would provide the US Department of Commerce with six months to formulate regulations that require this tracking technology.

Bipartisan Support for the Bill

Foster’s initiative has received backing from fellow Democrats, including Representative Raja Krishnamoorthi, who is on the House Select Committee on China. He commented, “On-chip location verification is one creative solution we should explore to stop this smuggling.”

Republican support also exists; however, formal endorsements have yet to be made since the legislation has not been introduced. Representative John Moolenaar, chair of the committee, expressed his support for location tracking and plans to meet with lawmakers in both chambers to discuss potential legislative actions.

Technological Implementation and Challenges

The proposed tracking technology would rely on chips communicating with a secure server, which would use the time it takes for signals to reach the server—operating on the principle that computer signals travel at the speed of light—to verify their locations.

Tim Fist, a former engineer and director at the Institute for Progress, clarified that while the tracking would provide a general, country-level location, it would offer more information than the Bureau of Industry and Security currently possesses, potentially allowing for better-targeted investigations into chip smuggling.

Foster noted that the second goal of his legislation—preventing AI chips from booting up if they are improperly licensed—would be more technically complex but necessary to discuss with chip and module providers.

Conclusion

The urgency surrounding chip smuggling, combined with the existing technologies for location verification, indicates a critical moment for US lawmakers to address these concerns decisively. As the potential for misuse of AI chips looms, effective legislative measures could play a pivotal role in safeguarding national security.