US Plans to Track Every Exported Advanced AI chip

The US is planning to introduce legislation that would make it mandatory for manufacturers of high-performance AI processors to add geographical location tracking to their products. This is reportedly being done to stop advanced AI components from falling into the hands of China.

Remember, the US government has already placed several export restrictions on advanced AI chips, including Nvidia’s H100 and A100. However, this geographical tracking takes things a notch higher.

As per reports, US officials are worried about increasing instances of AI tech smuggling, which means these chips ultimately end up in China in one way or another. The recently launched TheHas will get Live at Lauma has also been trained on Nvidia GPUs H20, which are controlled for export. This confirms America’s concern that China is using illegal channels to obtain these chips. Senator Tom Cotton from Arkansas has argued that this is the reason for his position. Introduced a bill which would allow the Commerce secretary to impose location control on these companies. The bill covers high performance AI processors such as the GeForce RTX4090 and RTX5090, as well other AI chips.

Companies will be required embed tracking technology into all high-end processing modules, even if they are already developed. After the bill is passed, companies will have six months in which to comply with the requirements.

Moreover, the US suspects that China may have purchased these restricted chips from countries listed on its list of export-free nations. The bill is designed to verify ownership and location of processors that are regulated.

In short, the US government has banned certain products from being exported to China. The products that can be exported are now embedded with live tracking. Location Tracking Could Be Overkill

If this bill becomes law, the Department of Commerce will work with the Department of Defense on a study that will last for one year to examine additional protective measures. The departments will also perform annual assessments for the next three years following the bill’s passage.

The Department of Commerce, if the additional measures are deemed appropriate, will work on them in order to finalize the rules within the next 2 years. This means that location tracking isn’t the final nail. In the coming years, the US may be planning to implement more control measures of this nature.

Although it is understandable to track the location of every US-made chip in the world, this seems a bit overkill. A ‘dictatorship-like’ approach can be detrimental to the free trade of technology. Even after spending billions on this technology, companies like Nvidia AMD and Intel will still have little control over who they can sell their products to.

This is the same as the government tightening their control over these companies. They are essentially playing the US government’s game in the global foreign trade policy. The US is implementing these draconian laws because it has a problem today with China. Who’s to say the government won’t use this law if tomorrow there is a conflict with the US, the UK, or the EU? Nvidia will be the hardest hit. Nvidia’s sales in China will account for 13% of its total sales, or $17 billion by January 2025. Plus, the tech giant has already received orders worth $18B for the current year.

Furthermore, the company is already planning to export a downgraded version of the H20 chip with lower computing power, which will fall outside the purview of the proposed export controls. However, the US might very well block this move or require location tracking on these chips as well.

Another issue with the proposed bill is the time period of the tracking. When does it stop? Does it stop at all? This could result in massive privacy scares, as retail customers using these trackable, tech-embedded products would, at all times, have their location exposed to the US authorities.

US Export Regulations Are in a Mess

The US export policy is currently as confusing as it has ever been. With arbitrary tariff rate increases, export bans, and now location tracking, the US is leaving no stone unturned to ensure artificial intelligence supremacy. However, this is based on the assumption that China is totally reliant on the US for AI development, which is far from the truth.

For instance, Huawei’s 910C GPU offers the same level of performance as Nvidia’s H100, which was released in 2022. To put it simply, China seems to be just three years behind the US when it comes to AI technology. Nvidia CEO Jensen Huang has also said that China is very close to the US.

Plus, now that China has finally started to produce US-comparable chips, it may start catering to the global chip market and export its homemade AI chips to other countries. In that case, these strict regulations may backfire on the US, and it may end up losing a sizable chunk of the global market to China.

So, this begs the question of whether such an extensive and restrictive export policy is actually needed. We have already seen how DeepSeek was built for a fraction of the cost of other AI models. So, China may catch up with the US sooner than expected.

For now, we’ll wait to see if and when this bill comes into force. The concerned companies may also put forward their reservations, and clauses may be worked out before being set into writing.