America’s quest to protect its semiconductor technology from China has taken increasingly dramatic turns over the past few years—from export bans to global restrictions—but the latest proposal from Congress ventures into unprecedented territory.
Lawmakers are now pushing for mandatory GPS-style tracking embedded in every AI chip exported from the United States, essentially turning advanced semiconductors into devices that report their location back to Washington.
On May 15, 2025, a bipartisan group of eight House representatives introduced the Chip Security Act, which would require companies like Nvidia to embed location verification mechanisms in their processors before export.
This represents perhaps the most invasive approach yet in America’s technological competition with China, moving far beyond restricting where chips can go to actively monitoring where they end up.
The mechanics of AI chip surveillance
Under the proposed Chip Security Act, AI chip surveillance would become mandatory for all “covered integrated circuit products”—including those classified under Export Control Classification Numbers 3A090, 3A001.z, 4A090, and 4A003.z. Companies like Nvidia would be required to embed location verification mechanisms in their AI chips before export, reexport, or in-country transfer to foreign nations.
Representative Bill Huizenga, the Michigan Republican who introduced the House bill, stated that “we must employ safeguards to help ensure export controls are not being circumvented, allowing these advanced AI chips to fall into the hands of nefarious actors.”
His co-lead, Representative Bill Foster—an Illinois Democrat and former physicist who designed chips during his scientific career—added, “I know that we have the technical tools to prevent powerful AI technology from getting into the wrong hands.”
The legislation goes far beyond simple location tracking. Companies would face ongoing surveillance obligations, required to report any credible information about chip diversion, including location changes, unauthorized users, or tampering attempts.
This creates a continuous monitoring system that extends indefinitely beyond the point of sale, fundamentally altering the relationship between manufacturers and their products.
Cross-party support for technology control
Perhaps most striking about this AI chip surveillance initiative is its bipartisan nature. The bill enjoys broad support across party lines, co-led by House Select Committee on China Chairman John Moolenaar and Ranking Member Raja Krishnamoorthi. Other cosponsors include Representatives Ted Lieu, Rick Crawford, Josh Gottheimer, and Darin LaHood.
Moolenaar said that “the Chinese Communist Party has exploited weaknesses in our export control enforcement system—using shell companies and smuggling networks to divert sensitive US technology.”
The bipartisan consensus on AI chip surveillance reflects how deeply the China challenge has penetrated American political thinking, transcending traditional partisan divisions.
The Senate has already introduced similar legislation through Senator Tom Cotton, suggesting that semiconductor surveillance has broad congressional support. Coordination between chambers indicates that some form of AI chip surveillance may become law regardless of which party controls Congress.
Technical challenges and implementation questions
The technical requirements for implementing AI chip surveillance raise significant questions about feasibility, security, and performance. The bill mandates that chips implement “location verification using techniques that are feasible and appropriate” within 180 days of enactment, but provides little detail on how such mechanisms would work without compromising chip performance or introducing new vulnerabilities.
For industry leaders like Nvidia, implementing mandatory surveillance technology could fundamentally alter product design and manufacturing processes. Each chip would need embedded capabilities to verify its location, potentially requiring additional components, increased power consumption, and processing overhead that could impact performance—precisely what customers in AI applications cannot afford.
The bill also grants the Secretary of Commerce broad enforcement authority to “verify, in a manner the Secretary determines appropriate, the ownership and location” of exported chips. This creates a real-time surveillance system where the US government could potentially track every advanced semiconductor worldwide, raising questions about data sovereignty and privacy.
Commercial surveillance meets national security
AI chip surveillance proposal represents an unprecedented fusion of national security imperatives with commercial technology products. Unlike traditional export controls that simply restrict destinations, the approach creates ongoing monitoring obligations that blur the lines between private commerce and state surveillance.
Representative Foster’s background as a physicist lends technical credibility to the initiative, but it also highlights how scientific expertise can be enlisted in geopolitical competition. The legislation reflects a belief that technical solutions can solve political problems—that embedding surveillance capabilities in semiconductors can prevent their misuse.
Yet the proposed law raises fundamental questions about the nature of technology export in a globalized world. Should every advanced semiconductor become a potential surveillance device?
How will mandatory AI chip surveillance affect innovation in countries that rely on US technology? What precedent does this set for other nations seeking to monitor their technology exports?
Accelerating technological decoupling
The mandatory AI chip surveillance requirement could inadvertently accelerate the development of alternative semiconductor ecosystems. If US chips come with built-in tracking mechanisms, countries may intensify efforts to develop domestic alternatives or source from suppliers without such requirements.
China, already investing heavily in semiconductor self-sufficiency following years of US restrictions, may view these surveillance requirements as further justification for technological decoupling. The irony is striking: efforts to track Chinese use of US chips may ultimately reduce their appeal and market share in global markets.
Meanwhile, allied nations may question whether they want their critical infrastructure dependent on chips that can be monitored by the US government. The legislation’s broad language suggests that AI chip surveillance would apply to all foreign countries, not just adversaries, potentially straining relationships with partners who value technological sovereignty.
The future of semiconductor governance
As the Trump administration continues to formulate its replacement for Biden’s AI Diffusion Rule, Congress appears unwilling to wait. The Chip Security Act represents a more aggressive approach than traditional export controls, moving from restriction to active surveillance in ways that could reshape the global semiconductor industry.
This evolution reflects deeper changes in how nations view technology exports in an era of great power competition. The semiconductor industry, once governed primarily by market forces and technical standards, increasingly operates under geopolitical imperatives that prioritize control over commerce.
Whether AI chip surveillance becomes law depends on congressional action and industry response. But the bipartisan support suggests that some form of semiconductor monitoring may be inevitable, marking a new chapter in the relationship between technology, commerce, and national security.
Conclusion: The end of anonymous semiconductors from America?
The question facing the industry is no longer whether the US will control technology exports, but how extensively it will monitor them after they leave American shores. In this emerging paradigm, every chip becomes a potential intelligence asset, and every export a data point in a global surveillance network.
The semiconductor industry now faces a critical choice: adapt to a future where products carry their own tracking systems, or risk being excluded from the US market entirely.
As Congress pushes for mandatory AI chip surveillance, we may be witnessing the end of anonymous semiconductors and the beginning of an era where every processor knows exactly where it belongs—and reports back accordingly.
See also: US-China tech war escalates with new AI chips export controls
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