US Tracks AI Chip Shipments Globally: A Closer Look at the Initiative

The US is intensifying measures to enforce export restrictions on AI chips to prohibited destinations, using trackers to detect possible violations. These trackers, sometimes the size of a smartphone, are hidden in shipments, including those from Dell and Super Micro Computer. The authorities involved include the Bureau of Industry and Security, the FBI, and Homeland Security Investigations. China opposes these devices, denouncing a desire to slow its technological development. The US has tightened restrictions on chip exports to China and Russia since 2022, and circumvention channels have been revealed in Singapore, Vietnam, and the UAE.

The United States is stepping up its measures to enforce export restrictions on advanced artificial intelligence (AI) chips, deploying tracking devices to detect potential violations. These trackers, sometimes as large as a smartphone, are hidden within shipments from major manufacturers like Dell and Super Micro Computer. The effort involves collaboration between the Bureau of Industry and Security, the FBI, and Homeland Security Investigations (HSI).

According to Reuters, U.S. authorities have secretly placed trackers in targeted shipments of advanced chips seen as high-risk for illegal diversion to China. The trackers aim to detect AI chips being diverted to destinations under U.S. export restrictions, focusing on select shipments under investigation [1].

The use of trackers is not new; U.S. law enforcement agencies have employed these devices for decades to track products subject to export controls, such as airplane parts. However, the deployment in AI chip shipments is a more recent development. The trackers can help build cases against individuals and companies that profit from violating U.S. export controls [1].

China has criticized the use of these devices, viewing them as part of a broader campaign to suppress its technological development. The Chinese foreign ministry has not provided immediate comment on the matter [1].

The U.S. Department of Commerce's Bureau of Industry and Security, which oversees export controls and enforcement, is typically involved in these operations. Homeland Security Investigations and the Federal Bureau of Investigation may also participate. The Commerce Department and the FBI have declined to comment on the use of trackers, while Super Micro and Dell have stated they do not disclose their security practices or are not aware of a U.S. government initiative to place trackers in their product shipments [1].

The U.S. has been tightening restrictions on chip exports to China and Russia since 2022. In 2024, a shipment of Dell servers with Nvidia chips included both large and discreet trackers, indicating the extent of the measures being taken. The use of trackers in chip-related investigations is not new; they have been used to combat illegal diversion of semiconductors in recent years [1].

The Trump administration has sought to relax some curbs on Chinese access to advanced American semiconductors while also proposing requiring U.S. chip firms to include location verification technology with their chips to prevent them from being diverted to countries where U.S. export regulations restrict sales [1].

The ongoing U.S.-China trade negotiations have resulted in the easing of restrictions on AI chip exports to China. The Trump administration has authorized Nvidia and AMD to resume selling some of their AI semiconductors to Chinese customers, with the companies agreeing to pay 15% of their revenues from certain Chinese AI chip sales to the U.S. government [2].

The use of trackers by U.S. law enforcement goes back decades. In 1985, Hughes Aircraft shipped equipment subject to U.S. export controls, and the U.S. Customs Service installed a tracking device during a search warrant execution [1].

The U.S. export enforcement agents sometimes install trackers after getting administrative approval or with a judge's warrant authorizing their use. The information obtained from these devices can be used as evidence in criminal cases [1].

The use of trackers has been revealed in the arrests of two Chinese nationals charged with illegally shipping tens of millions of dollars' worth of AI chips to China. The co-conspirator instructed another to check for trackers on Quanta H200 servers, which contain Nvidia chips [1].

The extension of the tariff deadline provides temporary relief for businesses and consumers, but it also prolongs the period of economic ambiguity. The ongoing trade negotiations and the easing of restrictions on AI chip exports to China are part of a broader effort to balance economic interests with national security concerns [2].

References:
[1] https://www.yahoo.com/news/articles/exclusive-us-embeds-trackers-ai-081416903.html
[2] https://theoutpost.ai/news-story/trump-extends-china-tariff-deadline-eases-ai-chip-export-restrictions-amid-ongoing-trade-talks-18963/