As the race for AI dominance intensifies, the United States (U.S.) is taking bold steps to tighten control over advanced semiconductor exports. A newly proposed bill, the Chip Security Act, would require location-tracking systems on AI chips subject to export restrictions, aiming to crack down on smuggling and unauthorised use—particularly by adversaries like China.
The bill, introduced by Republican Senator Tom Cotton, targets AI chips deemed critical to national security. It mandates that export-controlled chips, and any products containing them, must feature location verification technology capable of detecting diversion, tampering, or misuse. Exporters would also be required to report any suspicious activity or unauthorized relocation to the Bureau of Industry and Security (BIS), the agency tasked with enforcing export control laws.
This legislative move reflects mounting U.S. concerns that high-performance chips—especially Nvidia GPUs, widely used for training and deploying large AI models—are being funneled into Chinese markets through third-party countries and shell companies, circumventing official controls.
While the U.S. and China recently agreed to a 90-day pause on most tariffs, signaling a temporary thaw in trade tensions, efforts to restrict Chinese access to advanced AI technology remain a priority in Washington. The Chip Security Act builds on existing policy frameworks and emerges alongside reports that the Trump administration may roll back certain Biden-era AI export controls in favor of a more streamlined system.
Bipartisan Support Grows for AI Chip Tracking as Strategic Pressures Mount
Senator Cotton believes the bill will help balance national security with continued global access to American tech. “With these enhanced security measures, we can expand access to U.S. technology without compromising national security,” he said. Meanwhile, Democratic Representative Bill Foster is preparing to introduce a companion bill with similar provisions, signaling growing bipartisan support.
The legislation comes at a critical time. As China accelerates its ‘Made in China 2025’ initiative and pushes for self-sufficiency in advanced tech, American lawmakers are increasingly focused on AI-enabled military applications and the strategic value of semiconductors.
If passed, the Chip Security Act would compel chipmakers to embed location-tracking into hardware, potentially posing technical and supply chain challenges. It would also introduce new compliance burdens for exporters, who must ensure chips remain with their approved end users and report any deviations.
However, the potential payoff for U.S. national security could be significant. Tracking chips throughout their lifecycle could help U.S. agencies monitor export flows, uncover smuggling networks, and limit unauthorized military or surveillance use of AI hardware by foreign governments.
The Chip Security Act ultimately represents a new frontier in tech governance, blending export control with digital traceability—part of a broader U.S. strategy to secure its lead in the global AI arms race.
