AI chip tracking bill aims to curb China’s tech access

The U.S. government is escalating efforts to prevent advanced AI chips from reaching China through new location-tracking requirements. A newly proposed bill would mandate tracking systems for export-controlled AI semiconductors, addressing growing concerns about smuggling and unauthorized use of American technology that could enhance China’s military capabilities.

The big picture: Republican Senator Tom Cotton introduced the “Chip Security Act” that would require location-tracking mechanisms for export-controlled AI chips to prevent diversion to unauthorized users, particularly China.

• The Commerce Department would be directed to implement these verification systems on both the chips themselves and products containing them.
• Companies would be required to report to the Bureau of Industry and Security if their products are diverted from intended locations or subjected to tampering attempts.

Political context: The bill emerges days after President Donald Trump announced plans to rescind Biden-era export restrictions on sophisticated AI chips.

• Trump’s modifications aim to maintain U.S. leadership in AI while still restricting China’s access to advanced technology.
• Democratic Representative Bill Foster is planning to introduce a companion bill in the coming weeks, indicating bipartisan concern about AI chip diversion.

Why this matters: Reports of widespread smuggling of Nvidia chips into China have heightened concerns about U.S. technology being used to enhance China’s military capabilities.

• The tracking systems would help detect smuggling, diversion, or unauthorized use of advanced AI technology subject to export controls.
• Senator Cotton frames the bill as enabling broader technology access while preserving national security safeguards.