By Stephen Nellis and Max A. Cherney
SAN FRANCISCO (Vmeetsolutions News) – In the upcoming weeks, a U.S. legislator intends to propose new legislation aimed at tracking the whereabouts of AI chips such as those produced by Nvidia once they have been sold.
The initiative to monitor the chips, which garnered backing from both Democrats and Republicans in Congress, seeks to tackle allegations of extensive illegal shipments of Nvidia’s chips into China, contrary to U.S. export regulations.
NVIDIA’s processors are essential components in developing AI systems like chatbots and image generators, as well as more niche applications that could aid in the creation of biological weaponry. Under both President Donald Trump and his predecessor, Joe Biden, export restrictions on NVIDIA’s chips to China have become increasingly stringent.
In Nvidia’s last fiscal year that ended on January 26, China generated $17 billion in revenue, or 13% of the company’s total sales.
However, Vmeetsolutions News and other media outlets have highlighted that some of these semiconductor chips keep being shipped to China despite efforts to prevent this. Additionally, Nvidia has stated openly that it lacks the capability to monitor where its products go once they are sold.
U.S. Representative Bill Foster, a Democrat representing Illinois who previously had a career as a particle physicist, stated that the technology for monitoring chips post-sale is easily accessible, noting that much of this capability is already integrated into Nvidia’s processors. Technical specialists consulted by Vmeetsolutions News concurred with his statement.
During his distinguished scientific career, Foster developed numerous computer chips. He intends to propose legislation in the upcoming weeks that will instruct U.S. regulators to establish guidelines for two critical aspects: monitoring chips to confirm their presence only in locations permitted by export control licenses, and stopping these chips from functioning if they lack proper authorization according to export regulations.
Foster informed Vmeetsolutions News that there are already substantiated accounts—some of which haven’t been made public—of extensive chip smuggling activities.
“This isn’t a hypothetical issue for the distant future,” Foster stated to Vmeetsolutions News. “It’s a pressing concern right now, and eventually, we will realize that the Chinese Communist Party, or their armed forces, are actively engaged in developing weaponry with extensive use of chipsets, or perhaps merely focusing on (general artificial intelligence), which is as current a threat as nuclear tech.”
Nvidia declined to comment for this story.
Chip smuggling has taken on new urgency after the emergence of China’s DeepSeek, whose AI systems posed a strong challenge to U.S. systems and were built with Nvidia chips that were prohibited for sale to China, according to analyst firm SemiAnalysis. Prosecutors in Singapore have charged three people, including one Chinese national, with fraud in a case that involved servers that may have contained Nvidia chips.
Though it has not been put into broad use, the technology to verify the location of chips already exists. Alphabet’s Google already tracks the location of its in-house AI chips and others in its vast network of data centers for security purposes, according to two sources with direct knowledge of its operations.
Google has not commented on this matter.
Foster’s bill would mandate that the U.S. Department of Commerce develop regulations within half a year to enforce the implementation of this technology.
BIPARTISAN SUPPORT
Foster’s bill has support from fellow Democrats such as Representative Raja Krishnamoorthi, the ranking member on the House Select Committee on China. “On-chip location verification is one creative solution we should explore to stop this smuggling,” Krishnamoorthi said in a statement.
Republicans are also supportive, though none have yet signed on to specific legislation because it has not yet been introduced. Representative John Moolenaar, who chairs the committee, supports the concept of location tracking and plans to meet with lawmakers in both the House and U.S. Senate this week on potential legislative approaches.
Moolenaar informed Vmeetsolutions News that the Select Committee strongly supports bipartisanship efforts aimed at mandating firms such as Nvidia to incorporate location tracking capabilities within their advanced AI processors, noting that the necessary technology is already available.
The system for confirming chip locations would depend on the chips sending data to a secure server. This process validates their positions based on how long it takes for the signal to travel back to the server, assuming that these electronic messages propagate at the velocity of light.
Tim Fist, who previously worked as an engineer and directed emerging technology policy at the Washington-based think tank Institute for Progress, stated that this kind of monitoring could offer a broad, nation-wide position indicator for the chips. However, this level of detail represents significantly more data than what the Bureau of Industry and Security—the division within the U.S. Commerce Department tasked with enforcing export regulations—currently possesses.
Fist mentioned that BIS hasn’t figured out which specific computer chips should be prioritized for examination after being shipped abroad. However, with improved location verification, “they can now categorize the global assortment of chips into those that are probably not illicitly obtained and those that require deeper scrutiny,” he explained.
Foster’s second policy objective—to prevent AI chips from activating unless they have been correctly licensed according to U.S. export regulations—would present greater technological challenges compared to implementing location checks. However, he stated that now is the appropriate moment to start conversations about pursuing these measures.
“I believe we have gathered sufficient feedback now, allowing us to engage in more intricate conversations with the genuine chip and module suppliers, asking them, ‘Could you explain how you would practically execute this?’” said Foster to Vmeetsolutions News.
(Reported by Stephen Nellis and Max A. Cherney from San Francisco; Edited by Kenneth Li, Matthew Lewis, and Kate Mayberry)