Exclusive: US embeds trackers in AI chip shipments to catch diversions to China, sources say

U.S. authorities have secretly placed location tracking devices in targeted shipments of advanced chips they see as being at high risk of illegal diversion to China, according to two people with direct knowledge of the previously unreported law enforcement tactic.

The measures aim to detect AI chips being diverted to destinations which are under U.S. export restrictions, and apply only to select shipments under investigation, the people said.

They show the lengths to which the U.S. has gone to enforce its chip export restrictions on China, even as the Trump administration has sought to relax some curbs on Chinese access to advanced American semiconductors.

The trackers can help build cases against people and companies who profit from violating U.S. export controls, said the people who declined to be named because of the sensitivity of the issue.

Location trackers are a decades-old investigative tool used by U.S. law enforcement agencies to track products subject to export restrictions, such as airplane parts. They have been used to combat the illegal diversion of semiconductors in recent years, one source said.