The effort to keep tabs on the chips, which drew bipartisan support from U.S. lawmakers, aims to address reports of widespread smuggling of Nvidia's chips into China in violation of U.S. export control laws.
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.
U.S. Representative Bill Foster, a Democrat from Illinois who once worked as a particle physicist, said the technology to track chips after they are sold is readily available, with much of it already built in to Nvidia's chips. Independent technical experts interviewed by Reuters agreed.
Foster told Reuters that there are already credible reports - some of which have not been publicly disclosed - of chip smuggling occurring on a large scale.
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.
Google did not respond to a request for comment.
BIPARTISAN SUPPORT
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.
The technology for verifying the location of chips would rely on the chips communicating with a secured computer server that would use the length of time it takes for the signal to reach the server to verify where chips are, a concept that relies on knowing that computer signals move at the speed of light.
“BIS has no idea which chips they should be targeting as a potential high priority to investigate once they’ve gone overseas,“ Fist said. With location verification, “they now at least have bucketed the set of chips that are out there in the world into ones that are very likely to not have been smuggled and ones that warrant further investigation.”
“We’ve gotten enough input that I think now we can have more detailed discussions with the actual chip and module providers to say, ‘How would you actually implement this?’” Foster told Reuters.
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