U.S. lawmaker pushes chip tracking bill to stop Nvidia AI smuggling to China

Bill aims to enforce location verification and boot restrictions on AI chips amid rising export violations.

The Nvidia GB10 Grace Blackwell Superchip on display at the company’s GTC conference in San Jose, California, on March 19, 2025. Photo by Max A. Cherney/Reuters

By Anna Fadiah and Hayu Andini

As fears mount over the illicit flow of high-powered artificial intelligence chips into China, a U.S. lawmaker is preparing legislation aimed at closing the gaps in export control enforcement. Representative Bill Foster, a Democrat from Illinois and a former physicist, is spearheading a bipartisan effort to require post-sale chip tracking and boot restrictions for advanced chips like those manufactured by Nvidia. The proposed bill seeks to curb AI chip smuggling to China, an issue that has undermined U.S. technology export laws despite successive restrictions imposed by both the Trump and Biden administrations.

The chip tracking bill to stop Nvidia AI smuggling comes amid growing evidence that banned hardware continues to reach Chinese entities, including developers of cutting-edge artificial intelligence systems. With Nvidia’s chips essential to building powerful AI tools, concerns have escalated that unauthorized actors—possibly even the Chinese military—are exploiting U.S.-origin technologies in defiance of national security rules.

Foster’s chip tracking initiative gains momentum

Foster’s legislation, which he plans to introduce within weeks, would mandate the U.S. Department of Commerce to draft rules requiring location verification features on AI chips. It would also explore options to disable chips that are not authorized under U.S. export controls. Foster, who once designed computer chips during his scientific career, said the bill addresses an urgent security threat, not a hypothetical scenario.

“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 working on artificial general intelligence, which is as immediate as nuclear technology.”

Reports of smuggling are not isolated. Foster cited credible intelligence—some still undisclosed publicly—suggesting extensive illegal shipments of Nvidia’s restricted chips to China. While the chipmaker has claimed it cannot monitor its products once sold, Foster insists the tracking capabilities are already embedded in the hardware.

Built-in tracking tools and rising bipartisan concern

Technical experts, including those who previously worked in the semiconductor industry, agree that current technology can facilitate chip location tracking. Nvidia’s chips reportedly contain the functionality necessary to implement such verification, which would involve encrypted communications between chips and secure servers to triangulate a chip’s geographical location based on the time it takes for data to travel—an approach rooted in the physics of light speed.

Google, for example, already uses location tracking to monitor AI chips deployed in its global data center network, according to sources familiar with the matter. While Google declined to comment, experts say the tools are available, just underutilized by the industry at large.

Foster’s bill aims to change that. It will give the Commerce Department six months to establish enforceable guidelines for tracking chip locations and blocking unauthorized use. This move has already attracted support across the aisle, signaling that the chip tracking bill to stop Nvidia AI smuggling may have a clear path through Congress.

Deepening urgency with China’s AI advancements

Concerns intensified recently after analyst firm SemiAnalysis reported that Nvidia chips—intended to be restricted—were found powering DeepSeek, a Chinese AI company posing a serious challenge to U.S. tech dominance. The chips had reportedly entered China through illegal channels, defying sanctions.

Singaporean prosecutors have also charged three Chinese nationals with fraud involving servers suspected of housing restricted Nvidia chips, further highlighting the global scale of the export control breach.

As artificial intelligence continues to be integrated into military, bioengineering, and surveillance systems, lawmakers view unregulated chip access as a national security emergency. Foster’s legislation targets both present loopholes and future risks.

Republicans weigh in on export enforcement

While Foster has yet to officially introduce the bill, Republican lawmakers have shown interest in the concept. Representative John Moolenaar, who chairs the House Select Committee on the Chinese Communist Party, emphasized bipartisan support for implementing on-chip location tracking.

“The Select Committee has strong bipartisan support for requiring companies like Nvidia to build location-tracking into their high-powered AI chips—and the technology to do it already exists,” Moolenaar said.

Representative Raja Krishnamoorthi, the top Democrat on the committee, also backed the proposal, calling it a “creative solution” to combat chip smuggling and protect U.S. technological advantages.

Preventing unlicensed chips from activating

Alongside tracking, Foster’s bill proposes a more technologically demanding initiative: preventing AI chips from booting up unless they are authorized under U.S. export laws. This would require collaboration with manufacturers to embed digital locks or verification mechanisms into the chip’s firmware or software layers.

While technically complex, Foster believes the time has come to begin working with the industry to determine how best to implement such safeguards. “We’ve gotten enough input that I think now we can have more detailed discussions with the actual chip and module providers,” he said.

If enacted, the legislation would mark a turning point in U.S. export policy, shifting from reactive enforcement to proactive hardware-based control. It would also place the onus on companies like Nvidia to take greater responsibility for ensuring that their products do not end up in unauthorized hands.

Limited resources, growing risks

The Bureau of Industry and Security (BIS), which oversees U.S. export control enforcement, currently lacks tools to effectively trace the end location of exported chips. According to Tim Fist, a director at the Institute for Progress and a former engineer, this information gap makes it difficult to distinguish between legally exported chips and those smuggled into restricted markets.

“BIS has no idea which chips they should be targeting as a potential high priority to investigate once they've gone overseas,” Fist explained. Location verification would allow officials to “bucket” AI chips into those that likely comply with export laws and those that may warrant further investigation.

What comes next

As Foster prepares to introduce the chip tracking bill to stop Nvidia AI smuggling, the Biden administration and U.S. lawmakers face mounting pressure to adopt enforceable measures to protect American technology and national security. With bipartisan support, practical tracking technology, and a rapidly evolving global AI race, the moment may be ripe for regulatory intervention.

Nvidia declined to comment on the proposed legislation or on its existing ability to trace chips after they leave the company’s distribution network. However, if Foster’s bill gains momentum, the industry may soon be forced to adapt, fundamentally altering how AI chips are sold, tracked, and used around the world.