Inside US Plan to Protect Advanced AI Chips with Location Trackers

The US government is looking for ways to build enhanced location trackers into advanced AI chips, a senior official said. According to Yahoo Finance, US location trackers for AI chips are part of the country’s efforts to control the flow of semiconductors developed by American tech companies like NVIDIA to the Chinese market.

US AI Technology Strategy

Prevention of chip smuggling and maintaining American technology dominance are part of President Trump’s broader US AI action plan. The US government is looking to work with AI industry players in tracking foreign device misuse, including monitoring the movement of sensitive AI chip components.

Science and Technology Policy Director at the White House Office Michael Kratsios said physical or software updated to chips are among the options being considered to aid with traceability.

“There is discussion about potentially the types of software or physical changes you could make to the chips themselves to do better location-tracking. That is something we explicitly included in the plan,” Kratsios said.

Kratsios has been championing US AI technology globally. Recently, he attended APEC’s Digital and AI Ministerial Meeting in South Korea where he pushed for adoption of the technology.

“The next trailblazing breakthroughs will be made with and on American technology, and to fully harness them, you will want America’s AI infrastructure already in place,” he told delegates at the Meeting.
The US government is preparing federal funding tools aimed at supporting AI tech exports to allies.

US Chip Smuggling Legislation

The remarks made by Kratsios are consistent with those made by a US lawmaker back in May 2025. The lawmaker said the US planned to introduce a chip smuggling law to stop China’s access to NVIDIA semiconductors. The new law is expected to facilitate verification of location of AI semiconductors once they are sold.

If passed, the new law will require the US Commerce Department to ensure that advanced chips or products that contain such chips are equipped with a location verification mechanism to detect diversion after export.

The proposed legislation does not specify how the tracking mechanisms will work. However, companies that export AI chips will be responsible for reporting any violations to the Bureau of Industry and Security (BIS). These violations include tampering with the location trackers or changes in destination.

China’s Surveillance Concerns

But America’s move to track H20 chips for security purposes does not appeal to Beijing, which has been opposed to US surveillance and against efforts to curtail its AI tech sector. Beijing is particularly sensitive to chip sanctions that counter Huawei’s tech advancement or other emerging AI developers like DeepSeek.

Last week, Chinese regulators summoned NVIDIA representatives to discuss US location-tracking efforts and explain the security risks associated with the H20 AI chips. The regulators were concerned by potential backdoors that could allow US authorities to access or control the chips remotely.

Last month, the US government committed to ease chip exports, enabling NVIDIA to resume H20 export to China. The government said that the move was part of a trade agreement that will enable it to import rare-earth magnets from China. Speaking to Bloomberg Television, the Science and Technology Policy Director took a swipe at China’s AI strategy which he said, seeks to form a global entity to develop standards for AI governance and technology.

“We believe each country should set their own destiny on how they think about regulating artificial intelligence. The US model, which puts innovation first, will be the most attractive,” he said.

Kratsios said he is yet to discuss the location-tracking technology with Advanced Micro Devices (AMD) or NVIDIA. The White House