The U.S. government has reportedly added location-tracking mechanisms to AI server shipments, a move that has sparked concerns in China, especially regarding NVIDIA’s future in the region. 
The controversy centers on backdoor measures secretly inserted into AI chips, which were allegedly discovered by Chinese authorities. Beijing has been vocal about its opposition to these measures, and the discovery has only heightened tensions.
According to a Reuters report, the U.S. is using location-tracking devices to monitor the destination of AI chips to ensure they do not end up in countries subject to U.S. export restrictions. This is being done through select shipments under investigation, with companies like Dell and Supermicro reportedly involved in embedding these trackers. The trackers are described as being roughly the size of smartphones, and it is said that Chinese chip resellers have recently received shipments containing these devices.
The news comes at a time when relations between the U.S. and China are already strained, especially concerning NVIDIA’s operations in China. The controversy stems from the fact that the U.S. is placing these measures into equipment manufactured in China. While U.S. lawmakers have defended the move, arguing that these measures are necessary for national security, Beijing has opened an investigation into the alleged backdoors. This could have significant consequences for NVIDIA’s ability to sell its AI chips in China, potentially disrupting its business operations in the region.
NVIDIA has declined to comment on the matter, but the situation remains fluid as more details emerge.