US lawmakers push for chip Security Act to combat smuggling

[WORLD] A bipartisan coalition of eight U.S. lawmakers introduced a bill on Thursday requiring manufacturers of artificial intelligence (AI) chips, such as Nvidia, to implement technology that would verify the location of their chips before export. The Chip Security Act, introduced in the U.S. House of Representatives, seeks to address reports of U.S.-export-controlled AI chips being illicitly smuggled into China. Despite ongoing efforts by U.S. officials from multiple presidential administrations to curb their export to China, news outlets have reported continued shipments of these chips.

The bill, co-led by Representative Bill Foster, an Illinois Democrat, and Representative Bill Huizenga, a Michigan Republican, is part of a broader push to limit China’s access to advanced AI technologies that could bolster its military capabilities. The proposal comes in response to rising concerns over the potential misuse of these chips by “nefarious actors,” as described by Representative Huizenga. In parallel, Senator Tom Cotton, an Arkansas Republican, introduced a similar measure in the U.S. Senate last week.

The Chip Security Act would mandate that the U.S. Department of Commerce establish a “location verification mechanism” for export-controlled AI chips and products containing them, within six months of the bill’s passage. This mechanism would allow companies to track the movement of the chips and identify unauthorized transfers or tampering. Exporters would also be required to report any suspicious activity to the Bureau of Industry and Security (BIS).

The bill also places significant emphasis on maintaining the confidentiality of sensitive information throughout the development and implementation of these new security measures. Any tracking systems or safeguards introduced must be designed to protect the proprietary information and trade secrets of U.S. companies, including industry giants like AMD, Intel, and Nvidia. This ensures that while national security concerns are addressed, the competitiveness of American businesses remains safeguarded.

The legislation comes just days after former President Donald Trump announced plans to overturn the Biden-era “AI diffusion rule,” which had restricted chip exports to all but a few key allies. As of now, the Trump administration has not released details of a replacement policy. Meanwhile, the Chip Security Act aims to create a stronger framework to prevent unauthorized access to advanced AI chips.