U.S. officials have quietly placed tracking devices in certain shipments of advanced chips they see as likely to be illegally sent to China, two sources told Reuters.
The trackers are meant to spot AI chips being rerouted to destinations under U.S. export bans. They’re only used in specific investigations and can help build cases against those breaking export rules. Such devices have been used for decades on restricted items, like aircraft parts, and more recently to stop illegal chip diversions.
Five other people in the AI server supply chain said they’ve seen trackers in shipments from Dell and Super Micro, containing Nvidia and AMD chips usually hidden inside packaging, and sometimes even inside the servers. In one 2024 shipment of Dell servers with Nvidia chips, both large trackers on boxes and tiny ones inside the equipment were found.
Some resellers in China say they now routinely check diverted servers for trackers. In a recent U.S. case against two Chinese nationals accused of smuggling millions of dollars’ worth of AI chips, investigators cited messages warning to “look carefully” for trackers.
The Commerce Department’s Bureau of Industry and Security often leads such operations, sometimes alongside Homeland Security Investigations and the FBI. Depending on the case, trackers can be installed with company consent, without their knowledge, or under a court warrant.
The U.S. began restricting sales of advanced chips to China in 2022, aiming to slow its military growth. Washington is now weighing whether to require built-in location verification tech for chips. China calls the measures an attempt to block its rise and has pushed back against tracking proposals, even summoning Nvidia over concerns about possible “backdoors” in its products.
