US 'Secretly' Installs Trackers In China AI Chip Shipments To Prevent Diversion: Report

Last Updated:August 13, 2025, 22:51 IST

These shipments may include chips from top US firms like Nvidia and AMD, installed in servers made by companies such as Dell and Super Micro

The trackers are meant to alert US officials if restricted chips end up in countries like China, in violation of export rules. (AFP file photo)

US authorities have secretly embedded location tracking devices in shipments of advanced chips suspected of being illegally diverted to China, according to a report by Reuters. The move is part of a broader effort to enforce export controls aimed at limiting China’s access to cutting-edge American technology.

Citing sources with direct knowledge of the previously unreported tactic, the report said the trackers are hidden inside packaging of AI server shipments under investigation.

These shipments may include chips from top US firms like Nvidia and AMD, installed in servers made by companies such as Dell and Super Micro.

The trackers are meant to alert US officials if restricted chips end up in countries like China, in violation of export rules. The measure only applies to selected shipments considered high-risk.

According to the sources, some trackers are small and concealed within the servers, while others are larger—about the size of a smartphone—and fixed to the exterior packaging. In one case from 2024, a shipment of Dell servers with Nvidia chips reportedly included both types of trackers.

Five people involved in the AI server supply chain told Reuters they were aware of such tracking devices being used. One person said they had seen images and videos of resellers removing trackers from servers before delivery.

The US began restricting exports of advanced chips to China in 2022, citing concerns over their potential military use. Washington has since tightened those controls, though the Trump administration has recently signalled some openness to easing certain restrictions.

The trackers help build legal cases against companies or individuals violating export controls, said the sources, who requested anonymity due to the sensitivity of the matter.

US agencies reportedly involved in the operations include the Department of Commerce’s Bureau of Industry and Security, Homeland Security Investigations, and the FBI.

Location tracking has long been used by US law enforcement in export control cases, including for aircraft parts. Its use in semiconductor shipments reflects how seriously the US is taking enforcement in the AI chip sector.

The White House and Congress have also proposed making location verification technology mandatory in all high-end US chips, to ensure compliance with export rules.

China has strongly criticised the US approach, calling it an attempt to suppress its technological rise. Last month, China’s cyberspace regulator summoned Nvidia to raise concerns about alleged “backdoors" in its chips, claims the company has denied.

(With inputs from Reuters)

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First Published:

August 13, 2025, 22:49 IST

News world US 'Secretly' Installs Trackers In China AI Chip Shipments To Prevent Diversion: Report

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