How Nvidia AI chips are smuggled into China

Semiconductor Industry & Geopolitical Concerns - US authorities are reportedly placing secret trackers in shipments of advanced semiconductors to detect diversion to China [1] - The trackers range from small devices to smartphone-sized units, hidden in server packaging [2] - Export enforcement agents may act with administrative approval, potentially without a court order, to place these trackers [3] - Nvidia denies embedding backdoors in their chips, addressing concerns raised by the Chinese government [4] - US Treasury Secretary assured investors that there are no national security concerns with Nvidia chips [5] Illegal Export & Black Market - Two Chinese nationals were arrested for illegally exporting millions of US dollars worth of Nvidia chips to China [5] - A thriving black market in China for Nvidia products is estimated at 1 billion US dollars [6] - The tracking initiative highlights the difficulty in monitoring the global semiconductor supply chain, especially after chips leave factories in locations like Taiwan [7] Company Awareness & Response - Companies like Dell and Super Micro, which ship servers containing Nvidia chips, would likely need to be aware of the tracking, but did not respond to requests for comment [3] - Monitoring individual chips is far more complex than tracking entire server shipments, requiring embedded software [3][4] - Nvidia CEO denies diversion is happening [6]