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Covert Enforcement Measures Target High-Risk Exports
US authorities have been secretly installing location-tracking devices in select shipments of advanced AI chips deemed at high risk of being diverted to restricted destinations such as China, Reuters reported, citing sources with direct knowledge. These trackers, used only in shipments under investigation, aim to monitor movements and build cases against individuals or companies that violate export control laws.
Integration into Server Shipments
Multiple sources within the AI server supply chain confirmed that the devices have been hidden in shipments from Dell Technologies and Super Micro Computer containing chips from Nvidia and AMD. In some cases, trackers were placed both externally on shipping boxes and internally within packaging — and even inside servers. Reports from 2024 detailed the use of both large, smartphone-sized trackers and smaller, more discreet devices.
Enforcement Framework and Agency Involvement
The US Department of Commerce’s Bureau of Industry and Security (BIS) typically leads such operations, with the Homeland Security Investigations (HSI) and the FBI participating as needed. Depending on the case, authorities may install trackers with a company’s consent or without their knowledge, sometimes requiring a judicial warrant to ensure admissibility in court proceedings.
Geopolitical Context
The United States, which dominates the global AI chip supply chain, began restricting sales of advanced chips from companies like Nvidia and AMD to China in 2022, citing national security concerns and the need to slow China’s military modernization. Similar restrictions also apply to Russia. The White House and Congress have proposed mandating location-verification technology for chips to further prevent diversion to prohibited markets.
Industry and Government Responses
Super Micro declined to comment on the tracking initiative, citing security policy confidentiality.
Dell stated it was “not aware” of any US government program involving trackers in its shipments.
Nvidia denied installing secret tracking devices; AMD did not respond to Reuters’ request for comment.
China’s Foreign Ministry said it was unaware of the matter, while last month its cyberspace regulator expressed concern over potential “backdoors” in Nvidia chips — allegations the company has strongly rejected.
Ongoing Supply Chain Awareness
Some China-based chip resellers admitted they routinely inspect shipments for trackers before reselling, aware of the risk of embedded devices. In a recent US Department of Justice case, two Chinese nationals were charged with illegally shipping tens of millions of dollars’ worth of AI chips to China, with court documents citing explicit instructions to check for tracking devices in Quanta H200 servers.
This development highlights the growing intensity of US enforcement actions in the semiconductor sector, signaling that even as certain restrictions are eased, Washington is prepared to use covert measures to maintain control over the flow of strategic AI technology.
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