New legislation in pipeline to keep track of smuggled Nvidia AI chip to China

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 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.

Representative Bill Foster is drafting a bill that would give the Department of Commerce six months to develop tracking rules. The goal is to ensure that restricted chips don't land where they aren't supposed to and don't operate if they do.

According to Foster, the tools already exist. Nvidia's chips can support location tracking, and companies like Alphabet already use similar systems in their data centers to monitor hardware. This comes in the wake of reports of banned Nvidia chips being used in Chinese servers powering advanced AI systems including DeepSeek despite tightened U.S. export controls.

The legislation has rare bipartisan support. Both Democrats and Republicans on the House Select Committee on China say tracking is doable and overdue.

If this legislation comes through, it could reshape how high-end AI chips are sold and monitored especially for companies with exposure to international markets.

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