The U.S. is weighing a new approach to protect its lead in artificial intelligence: embedding location-tracking technology directly into high-end chips. The move comes as years of export controls—and recent escalations—have failed to fully stop smuggling into China, leaving policymakers looking for solutions that go beyond paperwork. This involves leading-edge AI GPUs such as Nvidia’s H20, which are otherwise already permitted to be sold in China following lengthy bans. Talking to Bloomberg, Michael Kratsios, Director of the White House Office of Science and Technology Policy and one of the architects of the administration’s AI action plan, confirmed that both software-based and physical tracking solutions are being discussed. “There is discussion about potentially the types of software or physical changes you could make to the chips themselves to do better location-tracking.” The idea was explicitly included in the plan unveiled last month, which aims to keep U.S. technology dominant as AI adoption accelerates globally. The urgency reflects a persistent problem: export controls aren’t closing the gap. Recent reports show Chinese companies obtained over $1 billion worth of Nvidia GPUs through smuggling in just three months, despite tightened U.S. restrictions. The challenge is compounded by third-party diversion routes through Southeast Asian nations such as Malaysia and Thailand, which U.S. officials are now scrutinizing as potential hubs for illicit shipments.

Full report : White House considering chip tracking to curb AI hardware smuggling to China amid enforcement gaps — software or hardware tracking could be next step in U.S. export controls over leading-edge AI silicon.