Nvidia builds AI chip-tracking software amid pressure over China smuggling: report
Nvidia Develops Location Verification Technology to Prevent Smuggling of Computer Chips
Nvidia has reportedly created location verification technology to track the usage of its computer chips, particularly in light of concerns about preventing China from smuggling its high-powered gear into the country.
This new software is intended to be integrated into Nvidia’s top-tier Blackwell chips, which are subject to strict export regulations that prohibit their sale to China.
According to Reuters, sources familiar with the matter revealed that Nvidia’s customers will have the option to install this technology.
While the primary purpose of this feature is to assist clients in monitoring the performance of their Nvidia chips, it can also provide a general location based on the communication delay between the chips and Nvidia’s servers.
Nvidia stated, “We’re introducing a new software service that enables data center operators to oversee the health and inventory of their entire AI GPU fleet.”
Lawmakers have urged Nvidia to ensure that its most advanced chips do not end up in the hands of Chinese companies competing with US tech giants for AI supremacy.
Recently, President Trump permitted Nvidia to sell its H200 chips, preceding the Blackwell model, to China, with the US government collecting a 25% fee on the transactions.
This decision was a significant victory for Nvidia CEO Jensen Huang, who had vigorously opposed the sales restrictions.
It marked a policy reversal for the Trump administration, which had previously limited such chip exports.
Although sales of the Blackwell and upcoming Rubin models are restricted, some Chinese companies have still managed to obtain them through illicit means.
DeepSeek, a Chinese AI company, reportedly acquired several thousand Blackwell chips to develop models that rival or exceed those of US competitors.
These banned chips were smuggled into China through a complex scheme involving their purchase in countries not subject to export controls and subsequent reassembly in China.
Most of Nvidia’s chips are manufactured in Taiwan.
Nvidia is just one of many companies grappling with challenges posed by China’s intense competition with the US in the AI sector.
The former CEO of Dutch chipmaker Nexperia alleged in a recent New York Times article that the company’s Chinese owners had been planning since 2019 to transfer technology and intellectual property back to China.
These events reportedly culminated in Dutch authorities intervening to take control of Nexperia in September.
