{"id":1449,"date":"2026-06-18T21:42:48","date_gmt":"2026-06-18T21:42:48","guid":{"rendered":"https:\/\/trustedmovinggroups.com\/?p=1449"},"modified":"2026-06-18T21:42:48","modified_gmt":"2026-06-18T21:42:48","slug":"bill-that-would-mandate-ai-chip-location-tracking-gains-industry-support","status":"publish","type":"post","link":"https:\/\/trustedmovinggroups.com\/?p=1449","title":{"rendered":"Bill that would mandate AI chip location tracking gains industry support"},"content":{"rendered":"
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A group of companies that specialize in tracking international shipments of sensitive technologies are backing a Capitol Hill bill that would require America\u2019s most powerful AI chips to incorporate stronger security mechanisms aimed at preventing the chips from reaching China and other adversaries. <\/p>\n

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The letter, signed by six companies, says that the Chips Security Act (CSA) would increase the competitiveness of American chip companies while closing key loopholes in the U.S.\u2019 export control regime. The move clashes with claims from semiconductor lobbying groups that the requirements would constrain America\u2019s booming chip industry. <\/p>\n

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Sent to Congressional leadership Thursday morning and seen by NBC News, the dispatch instead argues that more robust security verification would provide chip customers and manufacturers with assurance they are abiding by sensitive restrictions on chip sales. The companies argue this boosted confidence will \u201clead to increased sales, faster export approvals, larger transactions, greater access to new markets, and more expansive chip deals.\u201d <\/p>\n

Despite U.S. export control laws banning sales of advanced AI chips to certain countries including China, loopholes in current requirements have allowed billions of dollars worth of America\u2019s best AI chips to be sold to entities in third-party countries that can then forward the chips to China. In just one case from March, the Justice Department charged three individuals with conspiring to forward $2.5 billion of AI chips to China.<\/p>\n

The CSA aims to address those loopholes, mandating that chip exporters enable better tracking of where advanced chips are sent, either via bespoke location-verification hardware or software that can run on existing hardware. This, bill proponents claim, would ensure that sensitive chips can be sold to countries like Malaysia or Indonesia without fear of further transfer to China.<\/p>\n

The bill has been percolating in Washington for several months, as a variety of interest groups duke out the bill\u2019s impact on America\u2019s AI lead. Proponents and China hawks view the bill as a clear-cut way to address a critical national security failure, while certain industry groups have worried that it would hamper American sales abroad \u2014 something that the companies in Thursday\u2019s letter vehemently contest. <\/p>\n

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The House Foreign Affairs Committee unanimously approved the CSA in a 42-0 vote in late March, sending the bill to the wider House where it remains under review. The Senate\u2019s companion legislation remains in the first stages of consideration.<\/p>\n

The U.S. has enacted export controls to prevent its most coveted chips from being sent to adversarial countries. Because chips perform the advanced computations required for frontier AI systems, experts say that cutting off access to these chips is crucial to prevent geopolitical rivals from using AI systems for military or economic purposes. <\/p>\n

China\u2019s military has embraced AI, and Chinese AI companies like DeepSeek and Tencent have developed general AI systems that lag American companies\u2019 AI capabilities by a matter of months. Chinese AI companies have often claimed that their lack of chips is the primary barrier to develop better systems\u2014 a sign that America\u2019s export control system has worked to some extent.<\/p>\n

Chip smuggling or diversion could eliminate this bottleneck, which many experts say is a critical national security bulwark. In an April hearing, Select Committee on China Chairman John Moolenaar said: \u201cChinese companies are buying what they legally can under existing export control regimes and stealing what they cannot.\u201d<\/p>\n

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Other lawmakers in Washington have been reluctant to allow wider sales of American chips abroad given concerns about China-owned subsidiaries diverting chips to China. <\/p>\n

Some semiconductor companies have opposed the bill, saying it would unduly restrict their ability to sell chips abroad. The Semiconductor Industry Association, which represents leading chip companies like Nvidia and AMD, strongly opposes the CSA, arguing that \u201ccomplex, costly, and unproven security features risks undermining global trust in American semiconductor technologies.\u201d Nvidia announced in December that it has developed technology that could fulfill some of the CSA\u2019s requirements, as Reuters first reported.<\/p>\n

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GeoComply, one of the companies that signed Thursday\u2019s letter, said that better location verification was a straightforward win for American security and industry. The company works with companies like Amazon Prime Video, Fanduel and the BBC to ensure their services are only sold or offered in approved geographies.<\/p>\n

\u201cChip smuggling is actively eroding the export controls by putting advanced AI chips in the hands of our strategic competitors,\u201d said Kip Levin, GeoComply CEO. Location-verification technology \u201cto confirm that chips remain with authorized users, in authorized locations, gives legitimate buyers a way to prove compliance and gives policymakers the confidence to approve larger deals and broader exports,\u201d Levin said.<\/p>\n

GeoComply and the other companies that signed Thursday\u2019s letter, including Multibeam and Fortaegis, likely stand to benefit from added security-verification requirements, though the letter claims the added specifications are \u201ctechnically feasible\u201d and \u201cstrategically necessary.\u201d <\/p>\n

At the end of May, the Commerce Department\u2019s Bureau of Industry and Security (BIS) announced that it that had allowed companies to circumvent prohibitions on sales of advanced AI chips to China for the past year by selling the chips to subsidiaries of Chinese companies located in third-party countries \u2014 a potentially critical gap in the export-control approach.<\/p>\n

In response, Sen. Jim Banks, R-Indiana, and Andy Kim, D-N.J. sent a letter to BIS leadership last week asking the office to address the issue and clamp down on Chinese subsidiaries\u2019 ability to order advanced chips. <\/p>\n

\u201cIt\u2019s very clear that there\u2019s a significant problem about diversion of chips to China,\u201d said Chris McGuire, a senior fellow at the Council on Foreign Relations who focuses on emerging technologies. \u201cIf there are technical measures that can be helpful, we should be implementing them.\u201d<\/p>\n

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Half a dozen companies come out in support of the Chips Security Act, which would require location-tracking mechanisms for America\u2019s most advanced computing chips<\/p>\n","protected":false},"author":1,"featured_media":1128,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1449","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-artificial-intelligence"],"yoast_head":"\nBill that would mandate AI chip location tracking gains industry support - Trusted Moving Group<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trustedmovinggroups.com\/?p=1449\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bill that would mandate AI chip location tracking gains industry support - 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