u.s. considers embedding trackers in ai chips amid china tech war

2025-08-06 nvidia

Washington, Wednesday, 6 August 2025.
the white house is considering embedding location trackers in ai chips to monitor and control the flow of advanced semiconductors to china. this move comes as chinese authorities summoned nvidia to address security concerns regarding its h20 chip and u.s. tracking efforts. the u.s. aims to prevent smuggling and maintain its lead in technology. this initiative highlights the ongoing tensions in the u.s.-china tech war, potentially impacting nvidia’s sales and access to the chinese market.

white house pursues chip tracking

The U.S. government is exploring methods to equip AI chips with enhanced location-tracking capabilities [1][5]. This effort aims to prevent the flow of semiconductors produced by companies like Nvidia to China [1][5]. Michael Kratsios, Director of the White House Office of Science and Technology Policy, indicated that software or physical modifications to the chips themselves are under consideration to achieve better location tracking [1][5]. This initiative is part of a broader plan to curb smuggling and ensure U.S. technological dominance [1].

china’s response and nvidia’s h20 chip

China has expressed strong opposition to the U.S. plans [1]. Chinese internet regulators summoned Nvidia representatives to discuss security risks associated with the company’s H20 chips and U.S. tracking efforts [3][6]. The H20 chip is a customized version Nvidia designed to comply with U.S. export regulations for the Chinese market [6]. There are concerns that Nvidia’s computing chips have potential security issues, including tracking and remote shutdown capabilities [6][7]. China’s internet information office has requested Nvidia to provide explanations and materials regarding the security risks [6][7].

nvidia’s market position and stock implications

The U.S. government’s actions and China’s response could significantly impact Nvidia’s market position and stock performance [1]. Restrictions on chip sales to China could reduce Nvidia’s revenue potential and limit its access to a critical market [1]. However, the Trump administration had previously allowed Nvidia to resume sales of the H20 chip to China after Nvidia lobbied [6]. Nvidia has reportedly placed an order for 300,000 H20 chips with TSMC due to strong demand in China [6]. The uncertainty surrounding these restrictions and tracking efforts may introduce volatility to NVDA:NASDAQ [GPT].

competitive landscape and export controls

The U.S. is using export control measures to impede China’s technological advancements [1][6]. These measures target not only Nvidia but also other major semiconductor companies like AMD and Intel [6]. The U.S. Commerce Department is planning new export control measures for chip manufacturing subsystems to close loopholes in existing restrictions [7]. The U.S. is also strengthening monitoring of end-users of exported chips and exploring new chip location verification methods [7]. These actions reflect a broader strategy to maintain a competitive advantage in AI and related technologies [1][5].

Bronnen

china trade chip tracking