US lawmaker targets Nvidia chip smuggling to China with new bill
As the global race for artificial intelligence dominance intensifies, the U.S. is looking to tighten control over one of its most critical resources: Nvidia’s AI chips. A new bipartisan-backed bill aims to crack down on the illegal flow of these high-performance semiconductors into China, where they could be used in advanced military and AI applications.
AI Chips at the Center of a Geopolitical Tug-of-War
Nvidia’s chips are essential for training and operating AI systems — from chatbots and image generators to sophisticated systems capable of dangerous tasks, such as designing biological weapons. Over the past several years, both the Trump and Biden administrations have steadily imposed stricter export controls on the sale of these chips to China.
However, investigative reports by Reuters and others have revealed that smuggling remains rampant, with restricted Nvidia chips still making their way into the Chinese market, where companies like DeepSeek have allegedly used them to build powerful AI systems that directly rival American technology.
Bill Foster’s Two-Pronged Legislative Push
Enter U.S. Representative Bill Foster, an Illinois Democrat and former particle physicist. Drawing on his experience as a chip designer, Foster plans to introduce legislation within weeks that would mandate two critical measures:
- Location Tracking for AI Chips: The bill would require U.S. regulators to implement rules ensuring that AI chips can be tracked after sale to confirm they’re operating in authorized locations. Interestingly, Foster claims much of the necessary technology is already embedded within Nvidia’s chips.
- Operational Lockdown on Unlicensed Chips: The legislation would also begin laying the groundwork for AI chips to be rendered inoperable — effectively refusing to boot — if they are found in locations without proper export licenses.
“This isn’t a hypothetical, future concern,” Foster told Reuters. “We already have credible reports of large-scale chip smuggling. At some point, we’re going to find that the Chinese military is using vast networks of these chips for weapons development or AI research as critical as nuclear technology.”
Bipartisan Momentum and Industry Implications
Foster’s proposal has garnered support from both sides of the aisle. Representative Raja Krishnamoorthi, a Democrat and ranking member of the House Select Committee on China, described chip-level location verification as a creative and necessary solution. Republican Representative John Moolenaar also endorsed the plan, underscoring the broad political consensus on strengthening export controls.
The proposed chip-tracking technology would work by having AI chips periodically “ping” a secure server, using the time it takes for the signal to travel — at light speed — to verify their physical location at a country level. Experts argue this would give U.S. regulators far more oversight than the current system allows.
Tim Fist, a former engineer and now policy director at the Institute for Progress, noted that while the Bureau of Industry and Security currently lacks effective tools for identifying smuggled chips, location verification could at least narrow down which devices warrant closer inspection.
The Larger AI Arms Race
The urgency behind this initiative intensified after the emergence of China’s DeepSeek, a highly capable AI system reportedly built with Nvidia chips prohibited for sale to China. Singaporean authorities have also charged three Chinese nationals in connection with a case involving servers suspected of containing these restricted components.
Notably, tech giants like Google already employ location-tracking mechanisms for their proprietary AI chips within internal data centers, illustrating that the technology isn’t just feasible — it’s already in use.
While Nvidia declined to comment, the legislation signals a potential shift in how AI hardware is regulated globally, setting a precedent for tighter controls and heightened accountability in the AI supply chain.
Why It Matters
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