US authorities are covertly embedding tracking devices in select AI chip shipments to prevent illegal diversions to China, targeting high-risk servers from Dell and Super Micro with Nvidia and AMD chips, sources told Reuters, according to its report Wednesday.
The US has been employing the decades-old tracking technology to enforce chip export restrictions, with devices hidden in packaging and servers to build cases against violators, despite relaxed Trump-era policies, the report said.
According to the report, US officials have discreetly inserted location tracking devices into specific shipments of advanced chips deemed at risk of illegal redirection to China, citing two individuals with direct knowledge.
These efforts focus on identifying AI chips rerouted to destinations under US export bans, applied only to certain shipments under scrutiny, the sources noted.
The devices aid in constructing legal cases against those profiting from breaching US export regulations, according to the sources, who remained anonymous due to the issue's sensitivity.
Location trackers, a long-standing tool used by US law enforcement to monitor items like airplane parts under export controls, have been employed to counter semiconductor diversions in recent years, one source said.
Five individuals in the AI server supply chain confirmed awareness of trackers in shipments from manufacturers like Dell and Super Micro, incorporating chips from Nvidia and AMD.
These sources indicated that trackers are typically concealed within server shipment packaging, though they were unaware of who installed them or at what point in the shipping process.
Reuters could not ascertain the frequency of tracker use in chip-related probes or when US officials began using them for chip smuggling investigations. The US initiated restrictions on advanced chip sales by Nvidia, AMD, and others to China in 2022.
In a 2024 incident, two supply chain sources reported that a Dell server shipment with Nvidia chips contained large trackers on boxes and smaller, subtler devices hidden inside the packaging and servers themselves. Another individual claimed to have seen images and videos of trackers being removed from Dell and Super Micro servers by chip resellers, noting some larger trackers were about smartphone-sized.
Super Micro stated it does not disclose its "security practices and policies in place to protect our worldwide operations, partners, and customers," and declined to address US tracking actions. Dell said it is "not aware of a US Government initiative to place trackers in its product shipments." Nvidia declined to comment, and AMD did not respond to inquiries.
