US authorities have been placing location tracking devices on select shipments of AI semiconductors in an effort to track if chips are being diverted to China.

Trackers have been found in shipments of Nvidia and AMD chips contained in servers manufactured by Dell and Supermicro, according to a report from Reuters, citing people with direct knowledge of the situation.

According to the sources, the trackers are usually hidden in the packaging of the server shipments. While they had no knowledge of who was installing the tracking devices or where in the process they were being attached to the shipments, the sources speculated that the US Department of Commerce's Bureau of Industry and Security (BIS) was likely responsible, with Homeland Security Investigations (HSI) or the FBI also potentially involved.

Reuters said it was unable to determine when the US started tracking semiconductor shipments or how often trackers had been used to monitor shipments. However, two of the news outlet’s sources said that during 2024, a shipment of Dell servers containing Nvidia chips had large trackers attached to the box, and smaller trackers hidden inside the packaging and servers.

A third source cited by Reuters claimed to have seen images and videos of trackers the size of smartphones being removed from Dell and Supermicro servers by chip resellers.

None of the government agencies or chip companies mentioned in the report responded to Reuters requests for comment. Supermicro said it would not disclose its security practices, while Dell said it is “not aware of a US Government initiative to place trackers in its product shipments.”

The US government began restricting the export of cutting-edge AI chips to China in 2022, claiming that the sanctions are to stop the country from having access to advanced technology that could be used for military modernization and human rights abuses.

However, this hasn’t stopped China from getting its hands on restricted chips, with reports from 2024 suggesting that Chinese companies had still been able to obtain Nvidia chips contained in server products made by Supermicro, Dell, and Taiwan’s Gigabyte.

Earlier this month, the US Department of Justice arrested two Chinese nationals for their alleged involvement in the illegal shipping of tens of millions of dollars’ worth of high-performance AI chips to China.

The two suspects, Chuan Geng and Shiwei Yang, used their California-based company, ALX Solutions, to “knowingly and wilfully” ship "sensitive technologies” including GPUs from China to the US. The DOJ did not say which chips Geng and Yang have been accused of illegally shipping.