US, China still not friends? Trump admin 'secretly' placing trackers in AI chip shipment to catch illegal exports to China

The United States authorities have secretly placed location devices in targeted shipments of AI advanced chips, which, according to them, are at high risk of illegal diversion to China, two people familiar with a previously unreported law enforcement tactic said, Reuters reported.

The Trump administration took this step to detect AI chips being diverted to destinations that are under US export restrictions. Moreover, it has been applied to only select shipments, the people said.

This comes even after the Trump administration has tried to ease curbs on Chinese access to advanced US semiconductors. It further reflects the lengths to which the US has been moving to enforce its chip export restrictions on China.

What are these trackers, and how will they help?

These location trackers are decades-old investigative tools, used by the US law enforcement agencies to track products subject to export restrictions, like airplane parts.

In the past, these trackers were used to combat the illegal diversion of semiconductors, according to one of the sources.

The trackers are normally hidden in the package of the server shipments, the sources said, adding that they are not aware of which parties were involved in installing them.

The people familiar with the matter said that these trackers will help in building cases against people and companies who profit from violating US export controls.

According to a Reuters report, five other people, who are involved in the AI server supply chain, said that they are aware of the use of the trackers in shipments of servers from manufacturers including Dell and Super Micro.

The sources further alleged that the US Department of Commerce's Bureau of Industry and Security, which oversees export controls and enforcement, is typically involved in this, while Homeland Security Investigations and the Federal Bureau of Investigation may take part too.