US lawmaker targets Nvidia chip smuggling

SAN FRANCISCO — A US lawmaker plans to introduce legislation in coming weeks to verify the location of artificial-intelligence chips like those made by Nvidia after they are sold.

The effort to keep tabs on the chips, which drew bipartisan support from US lawmakers, aims to address reports of widespread smuggling of Nvidia's chips into China in violation of US export control laws.

Nvidia's chips are a critical ingredient for creating AI systems such as chatbots, image generators and more specialized ones that can help craft biological weapons. Both President Donald Trump and his predecessor, Joe Biden, have implemented progressively tighter export controls of Nvidia's chips to China.

But Reuters and other news organizations have documented how some of those chips have continued to flow, and Nvidia has publicly claimed it cannot track its products after they are sold.

US Rep. 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 into Nvidia's chips. Independent technical experts interviewed by Reuters agreed.

Foster, who successfully designed multiple computer chips during his scientific career, plans to introduce in coming weeks a bill that would direct US regulators to come up with rules in two key areas: Tracking chips to ensure they are where they are authorized to be under export control licenses, and preventing those chips from booting up if they are not properly licensed under export controls.

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.

"This is not an imaginary future problem," Foster told Reuters. "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 or AI), which is as immediate as nuclear technology."

Nvidia declined to comment for this story.

Chip smuggling has taken on new urgency after the emergency of China's DeepSeek, whose AI systems posed a strong challenge to US 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 Chinese nationals 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 did not respond to a request for comment.

Foster's legislation would give the US Department of Commerce six months to come up with regulations to require the technology.