US Secretly Tracks AI Chip Shipments to Prevent Diversion to China

US authorities have embedded location tracking devices in advanced chip shipments to prevent diversion to China, according to Reuters. The tactic involves secretly placing tracking devices in targeted shipments, allowing authorities to monitor the chips' location. This move aims to prevent the illegal diversion of sensitive technology to China, a strategic competitor to the US.

In a recent development, US authorities have secretly embedded location tracking devices in targeted shipments of advanced chips to detect illegal diversion to China, according to Reuters. This move underscores the lengths to which the US is going to enforce its chip export restrictions on China, even as the Trump administration has sought to relax some curbs on Chinese access to advanced American semiconductors.

The tracking devices, which are typically concealed in the packaging of server shipments, are used to monitor the chips' location and build cases against individuals and companies profiting from export control violations. Five industry sources involved in the AI server supply chain confirmed awareness of these trackers in shipments from manufacturers such as Dell and Super Micro, which contain chips from Nvidia and AMD [2].

The use of trackers by US law enforcement goes back decades. In 1985, Hughes Aircraft shipped equipment subject to US export controls, and the US Customs Service intercepted the crate at a Houston airport and installed a tracking device [1]. The trackers can be installed with or without the knowledge of the shipping company, depending on the investigation's specifics.

The US Department of Commerce's Bureau of Industry and Security, Homeland Security Investigations, and the Federal Bureau of Investigation are typically involved in these operations. The Commerce Department and the Chinese foreign ministry did not respond to requests for comment, while Super Micro and Dell declined to comment on any tracking actions by US authorities. Nvidia and AMD did not answer requests for comment [1].

This development comes amidst growing tensions between the US and China over technology exports. The US has sought to limit exports of chips and other technology to China to restrain its military modernization. China has slammed these export curbs as part of a campaign to suppress its rise and criticized the location tracking proposal [1].

The use of trackers by US law enforcement goes back decades. In 1985, Hughes Aircraft shipped equipment subject to US export controls, and the US Customs Service intercepted the crate at a Houston airport and installed a tracking device [1]. The trackers can be installed with or without the knowledge of the shipping company, depending on the investigation's specifics.

The US Department of Commerce's Bureau of Industry and Security, Homeland Security Investigations, and the Federal Bureau of Investigation are typically involved in these operations. The Commerce Department and the Chinese foreign ministry did not respond to requests for comment, while Super Micro and Dell declined to comment on any tracking actions by US authorities. Nvidia and AMD did not answer requests for comment [1].

This development comes amidst growing tensions between the US and China over technology exports. The US has sought to limit exports of chips and other technology to China to restrain its military modernization. China has slammed these export curbs as part of a campaign to suppress its rise and criticized the location tracking proposal [1].

References:
[1] https://www.reuters.com/world/china/us-embeds-trackers-ai-chip-shipments-catch-diversions-china-sources-say-2025-08-13/
[2] https://www.investing.com/news/world-news/us-places-tracking-devices-in-ai-chip-shipments-to-prevent-china-diversion--report-93CH-4187346