Nvidia privately confirmed it could track chips to fight smuggling, even as industry publicly questioned feasibility

Illinois Rep. Bill Foster told MIT Technology Review that Nvidia representatives privately said the company could technically meet the anti-smuggling requirements in the Chip Security Act. Publicly, the Semiconductor Industry Association, which counts Nvidia as a member, opposed the bill in March 2026 and called its tracking mandates "new, untested, and potentially infeasible."

The bill would require location verification for advanced AI chips to stop smuggling to China. It is one of three chip security bills being considered for the Senate's National Defense Authorization Act. After the Nvidia CEO's resignation over his reported affair with an alleged Chinese spy, those bills are getting fresh attention.

Let's be precise about the evidence. Foster says Nvidia never put anything in writing. Nvidia didn't respond to requests to confirm his account. So this is one lawmaker's description of technical conversations, not a company admission. Still, it lines up with what Nvidia has built. Its Fleet Intelligence tool, announced in December 2025, lets customers monitor chips across data centers and can indicate which country they're in, Nvidia confirmed to Reuters.

If the capability exists, the industry's public argument looks weak. Calling a requirement infeasible is different from calling it unwelcome. We'd like to see Nvidia say plainly which one it means.

Our view is that some form of location verification for the most advanced chips is reasonable and overdue. The bill gives options: facility inspections, company attestations, or a ping-based check where the GPU reports its location when it comes online. the Center for Security and Emerging Technology found the ping approach the most cost-effective. That's a light touch compared with the scale of what's at stake.

There are real downsides to name. Tracking only tells investigators where a chip is. It doesn't stop it working. Foster plans stricter legislation next year that would require a verified license before an advanced GPU can connect. That's a much bigger step. It creates a remote kill switch on critical infrastructure, and a mechanism like that could fail, be abused or become a target. We'd want strong safeguards before going that far.

Nvidia's own line has been that diversion is insignificant, a drop in the bucket compared with China's domestic compute. Maybe. But the company now sits at the center of an investigation into Megaspeed, the Singapore firm run by Alice Huang, and a Commerce inquiry into Megaspeed was reportedly halted after Nvidia stepped in. That makes "trust us" a hard sell. I'm watching whether the NDAA carries any of these bills.

The Chip Security Act was introduced in May 2025, when lawmakers said the technology already existed. Megaspeed is under investigation for smuggling advanced GPUs to China and reportedly bought chips from Supermicro, which packages Nvidia chips into servers. Foster sits on the House Science, Space, and Technology Committee.