US is secretly tracking AI chip shipments from Nvidia, AMD, Dell and others: Here’s why

US authorities are secretly placing location tracking devices in certain shipments of advanced chips from companies like Nvidia, Dell, AMD, Nvidia among others, reports news agency Reuters. These tracking devices, the report which quotes people with direct knowledge of the matter says, are aimed to prevent these chip shipments from being illegally diverted to China. The tactic applies only to select shipments already under investigation, the sources said.The trackers are often hidden in packaging and, in some cases, inside the servers themselves. Some are roughly the size of a smartphone. The US Commerce Department’s Bureau of Industry and Security, Homeland Security Investigations, and the FBI are typically involved, the report says.They are used to detect whether AI chips are being sent to destinations under US export restrictions. Reuters report quotes officials who say the move is part of broader efforts to enforce curbs on China’s access to advanced American semiconductors. The devices, the sources claim, can help build cases against individuals and companies that violate U.S. export rules.Location trackers have long been used by US law enforcement to monitor exports such as airplane parts. In recent years, they have been deployed to combat the illegal diversion of semiconductors.

How chip makers responded

Super Micro said it does not disclose its “security practices and policies” and would not comment on tracking actions. Dell, on the other hand, said it was “not aware of a US Government initiative to place trackers in its product shipments.”

US-China tech tensions

US, a leader in the global AI chip supply chain, has recently tightened export controls on China from 2022 to limit its military development. Similar restrictions apply to Russia. Proposals in the White House and Congress have suggested requiring location verification technology in chips to prevent diversion.China has criticized the restrictions as an attempt to suppress its growth. Last month, its cyberspace regulator called in Nvidia to discuss concerns over alleged “backdoors” in its chips, a claim Nvidia has denied.Some Chinese resellers have reportedly said they inspect diverted shipments for trackers before delivery due to the risk of them being embedded. In a recent US Justice Department case, a co-conspirator told a defendant to “look carefully” for trackers on servers containing Nvidia chips.