In response to reports of large-scale smuggling of NVIDIA (NVDA, Financial) chips to China, a U.S. congressman plans to introduce legislation to track the sales and destinations of AI chips. The initiative, supported by bipartisan lawmakers, aims to ensure compliance with U.S. export control laws, which have been progressively tightened by previous administrations on NVIDIA's chip exports to China. The chips are vital for creating AI systems and accusations of their unauthorized entry into China have raised national security concerns.
Rep. Bill Foster, a former particle physicist, emphasizes that technology for tracking chip locations already exists. Foster plans to propose legislation within weeks to require U.S. regulators to implement rules in two key areas: tracking chips to confirm authorized destinations under export control licenses and preventing unlicensed chips from being operational.
Reports suggest that China's DeepSeek has heightened the urgency, given its significant challenge to U.S. systems using banned NVIDIA chips. While some companies, like Alphabet (GOOGL), already use chip-tracking technology for security, the U.S. Department of Commerce would have six months to draft related regulations. The proposal gains traction with bipartisan support for mandated location tracking features in NVIDIA's high-performance chips.
