Spy twist? US allegedly bugged AI chips of Nvidia and AMD bound for China with hidden trackers

US government AI chip tracking to China: The US government is reportedly taking secretive steps to stop high-end AI chips from ending up in China, as per a report. According to anonymous sources cited by Reuters, federal authorities have been placing hidden location trackers inside certain shipments of AI servers and chips. This measure is part of an investigation targeting shipments suspected of being illegally diverted to China, as per the Tom's Hardware report.

Is the US Hiding Trackers in AI Chip Shipments to China?

These trackers aren’t placed on every shipment, but only on those considered “high risk,” according to the report. Because putting trackers on all shipments would be too costly, authorities focus on targeted shipments believed to be vulnerable, as per the Tom's Hardware report.

The devices have been found in shipping containers, inside server packaging, and even built into the racks holding the servers, according to the Tom's Hardware report. Some of these trackers are reportedly as large as smartphones, and have been discovered in equipment from companies like Dell and Super Micro, as per the report.


Those involved in smuggling are also aware of the tracking, according to Tom's Hardware. Court documents from a recent smuggling case reveal that suspects have warned each other to watch out for trackers on shipments, as per the report.

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Nvidia Denies Advanced AI Chips Reaching China

Meanwhile, Nvidia’s CEO Jensen Huang has repeatedly denied that the company’s most advanced AI chips are making their way to China, even as reports suggest a billion-dollar black market exists for these chips in East Asia, as reported by Tom's Hardware.

Why the US Is Cracking Down on AI Chip Exports to China

The US government is keen to slow China’s progress in AI because it is considered a ‘dual-use technology’ that is applicable in both civilian and military purposes, according to the report.

Export controls have been placed on the most powerful chips from Nvidia and AMD, with bans on even specific models, especially designed to comply with the initial set of export controls like the Nvidia H20 and AMD MI308, in April 2025, as per the report.

While some restrictions have since eased, the most powerful new chips remain off-limits for export to China, according to Tom's Hardware. AMD and Nvidia have even agreed on a deal to share 15% of the sales revenue with the government in exchange for export licenses for their H20 and MI308, as per the report.

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FAQs

Why is the US putting trackers on AI chip shipments?
To prevent high-end AI chips from being illegally diverted to China as part of an ongoing investigation.

Are all shipments being tracked?
No, only high-risk shipments are allegedly targeted due to cost and strategic focus.