US authorities secretly place location tracking devices in targeted AI chip shipments to China

US authorities have been secretly placing location tracking devices inside of shipments of advanced AI chips and AI servers that are at high risk of illegal diversion into China.

In a new report from Reuters, it's being reported that the new measures have been enacted to detect AI chips being diverted through countries that are under US export restrictions, and apply only to particular shipments that are under investigation. This move shows how far the US is willing to go to enforce its chip export restrictions to China, and that's even with the Trump administration relaxing some of the US export restrictions to give China access to some advanced US-designed semiconductors.

The trackers are a decades-old investigative tool used by US law enforcement agencies, so that they can track products that are under export restrictions, including airplane parts. Trackers have been used to combat the illegal diversion of semiconductors in the past years, according to one of Reuters' sources.

It's not just AI chips that have tracking devices installed, but also the AI server supply chain that is aware of trackers being used in shipments of servers from manufacturers including Dell and Super Micro, with their AI servers containing AI chips from NVIDIA and AMD.

Reuters' sources said that the trackers are normally hidden inside of the packaging of the server shipments, noting that they weren't aware which parties were involved in the physical installation (or hiding) of the trackers, and where along the shipping routes they were being installed.

One of Reuters' sources said that they had eyes-on with images and videos of trackers being removed by other chip resellers from Dell and Super Micro AI servers, with one of the people saying some of the bigger trackers were about the size of a regular smartphone.

The US Department of Commerce's Bureau of Industry and Security, which oversees export controls and enforcement, is normally involved with these matters, with Homeland Security Investigations and the Federal Bureau of Investigation possibly taking part in this as well, said Reuters' sources.

Super Micro said in a statement that it does not disclose its "security practices and policies in place to protect our worldwide operations, partners, and customers" and declined on further comments on any tracking actions that US authorities might be doing. Dell said that it is "not aware of a US government initiative to place trackers in its product shipments", while NVIDIA declined to comment, and AMD didn't answer Reuters' request for comment.