NVIDIA faces new regulations that tracks AI chips, bricks illegal AI systems used in China

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US lawmaker plans to introduce new legislation that would verify the location of AI chips after they're sold, which would effectively solve the NVIDIA AI chip smuggling into China.

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We know there are boatloads of high-end GPUs and AI chips entering China, even after the continuously strengthened US export restrictions, but those NVIDIA chips continue to flow into the country, with NVIDIA publicly claiming the company has no way of tracking where their products are after they're sold.

But now, U.S. Representative Bill Foster, a Democrat from Illinois who once worked as a particle physicist, said that technology to track chips after they're sold isn't hard, and that much of it is already baked into NVIDIA chips, with "independent technical experts interviewed by Reuters agreed".

Foster has successfully designed multiple computing chips during his career, plans to introduce a new bill in the coming weeks that would direct US regulations to come up with rules in two key areas: first, the tracking of chips to ensure they are where they're authorized to be under export control licenses, and two, preventing those AI chips from booting up if they're not properly licensed under export control.

• Read more: RTX 5090D under a 'full sales ban' in China, no more RTX 5090D cards to be sold

Foster spoke with Reuters that there are already credible reports, some of which haven't been publicly disclosed, of large-scale chip smuggling into China. Foster told Reuters: "This is not an imaginary future problem. It is a problem now, and at some point we're going to discover that the Chinese Communist Party, or their military, is busy designing weapons using large arrays of chips, or even just working on (artificial general intelligence), which is as immediate as nuclear technology".

The new on-chip location verification technology would verify the location of the chips through communicating with the chip in question with a secured server, which would use the length of time it would take for the signal to reach the server to verify where the chips are exactly.

• Read more: US government bans NVIDIA from selling H20 AI GPUs to China for the 'indefinite future'

The second part of Foster's proposed legislation would prevent AI chips from booting up if they're not properly licensed under US export controls, which would be a super-advanced version of the location verification technology. Foster told Reuters: "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?'".