US senator introduces bill calling for location-tracking on AI chips to limit China access

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(Reuters) -A U.S. senator introduced a bill on Friday that would direct the Commerce Department to require location verification mechanisms for export-controlled AI chips, in an effort to curb China’s access to advanced semiconductor technology.

Called the “Chip Security Act,” the bill calls for AI chips under export regulations, and products containing those chips, to be fitted with location-tracking systems to help detect diversion, smuggling or other unauthorized use of the product.

“With these enhanced security measures, we can continue to expand access to U.S. technology without compromising our national security,” Republican Senator Tom Cotton of Arkansas said.

The bill also calls for companies exporting the AI chips to report to the Bureau of Industry and Security if their products have been diverted away from their intended location or subject to tampering attempts.

The move comes days after U.S. President Donald Trump said he would rescind and modify a Biden-era rule that curbed the export of sophisticated AI chips with the goal of protecting U.S. leadership in AI and blocking China’s access.

U.S. Representative Bill Foster, a Democrat from Illinois, also plans to introduce a bill on similar lines in the coming weeks, Reuters reported on Monday.

Restricting China’s access to AI technology that could enhance its military capabilities has been a key focus for U.S. lawmakers and reports of widespread smuggling of Nvidia’s chips into China in violation of export control laws have further amplified the concerns.

(Reporting by Deborah Sophia in Bengaluru; Editing by Shounak Dasgupta)