A U.S. lawmaker is preparing to propose legislation aimed at monitoring the post-sale location of advanced AI chips, such as those produced by Nvidia, to prevent them from being smuggled into China in violation of export controls. The move, which has bipartisan backing, is in response to reports that banned chips are still making their way into China, despite strict U.S. restrictions imposed during both the Trump and Biden administrations.

Representative Bill Foster, a Democrat from Illinois and former physicist, plans to introduce a bill in the coming weeks that would instruct U.S. regulators to draft rules for two main objectives: tracking the chips to ensure they remain where they're legally allowed and preventing unlicensed chips from operating. Foster emphasized that the technology to do this already exists, with features already embedded in Nvidia chips and used by firms like Google for internal security.

Nvidia, which earned $17 billion in revenue from China in its last fiscal year, has stated that it cannot track its chips once sold. However, reports from Reuters and other sources have revealed evidence of large-scale smuggling and use of these chips in Chinese AI projects like DeepSeek, potentially including military applications. Foster and other lawmakers warn that this is not a hypothetical issue — they believe China's government and military may already be using smuggled chips for advanced AI development, including artificial general intelligence (AGI) or even weapons systems.

Foster’s bill would require the U.S. Commerce Department to develop regulations within six months mandating location verification for AI chips. The proposal is supported by both Democrats and Republicans, including Representative Raja Krishnamoorthi and Representative John Moolenaar, although formal Republican co-sponsorship is pending.

The location-tracking system would likely work by having chips communicate with secure servers, using signal delays to determine their geographic location. While this would only provide general regional data, experts say it would still greatly enhance the government's ability to monitor potential export violations. A second part of the proposal — disabling chips that aren’t properly licensed — would be more technically challenging but is also being explored. Foster said it's time to engage directly with chip manufacturers to begin discussions on how to implement these solutions.