According to media reports, U.S. authorities are secretly placing location-tracking devices in batches of chips that could be illegally diverted to China. The trackers are reportedly being used in shipments of equipment from Dell, SuperMicro, Nvidia, and AMD.
As Reuters reported this week, citing its own anonymous sources, this U.S. government tactic is applied only to select shipments and is aimed at detecting instances where batches of AI chips are diverted to destinations that should be subject to export restrictions. The trackers are intended to help in pursuing cases against individuals and companies that profit from violating export controls.
At the same time, it is noted that U.S. law enforcement agencies have been using such methods for several decades and often track items subject to export controls (for example, aircraft parts). According to one source, in recent years trackers have also been used to combat the illegal trafficking of semiconductors.
Another five people involved in the AI server supply chain told the news agency that trackers are commonly used to monitor shipments of server hardware from manufacturers such as Dell, Super Micro, Nvidia, and AMD. According to them, the “beacons” are usually hidden in the packaging, but it is unclear who installs them and at what point along the route this occurs.
For example, in one case in 2024, a shipment of Dell servers with Nvidia chips was allegedly fitted with large trackers on the shipping cartons, and smaller, more discreet devices hidden inside the packaging and even inside the servers themselves.
In another instance, the source said he personally saw images and videos showing other chip suppliers removing tracking devices from Dell and Super Micro servers. He added that some of the largest devices were about the size of a smartphone.
According to the agency’s sources, such operations typically involve the U.S. Department of Commerce’s Bureau of Industry and Security, which oversees exports, and may also involve Homeland Security Investigations (HSI) of U.S. Immigration and Customs Enforcement and the Federal Bureau of Investigation (FBI).
Reuters reports that it was not possible to determine how often the trackers were used in investigations, or when exactly U.S. authorities began using them in their investigations.
Super Micro stated that the company does not disclose “its security methods and policies used to protect operations, partners, and customers worldwide.” The company declined to comment on any tracking actions by U.S. authorities.
Dell stated that the company “is not aware of any U.S. government initiative to place trackers in the products it supplies.” Nvidia said it does not install secret tracking devices in its products. AMD representatives did not respond to Reuters’ request for comment.
It is worth noting that this publication appeared against the backdrop of a serious conflict that broke out in early August between the Chinese authorities and Nvidia.
The point is that the Chinese regulator — the Cyberspace Administration of China (CAC) — accuses Nvidia of embedding secret tracking tools and remote shutdown mechanisms (“backdoors” and “kill switches”) in H20 AI chips specifically designed for the Chinese market (these are cut-down versions of flagship AI chips with reduced performance).
Shortly before that, Nvidia received approval to resume sales of the H20 after Washington lifted the previously imposed export ban.
In response, Nvidia representatives categorically rejected the allegations, stating that the company’s chips contain no backdoors or means for remote shutdown, and emphasized that such features would violate fundamental cybersecurity principles.
“To reduce the risk of abuse, some experts and policymakers propose mandating the inclusion of hardware ‘kill switches’ or built-in controls that can remotely disable graphics processors without the user’s knowledge or consent,” Nvidia Chief Security Officer David Reber wrote in a company blog. “Some even suspect they already exist. Nvidia graphics cards do not have and should not have kill switches or backdoors. [Backdoors and kill switches] in chips would be a real gift to hackers and malicious actors. It would undermine the global digital infrastructure and trust in American technology. Existing law sensibly requires companies to fix vulnerabilities, not create new ones.”