New law would require location tracking on exported AI chips

What does this do?

The Chip Security Act requires the Commerce Department to add location-tracking technology to advanced chips covered by U.S. export rules before they are sold or shipped abroad. Companies that export these chips must immediately report to the government if a chip is moved to an unauthorized location, handed to an unauthorized user, or tampered with. The law also directs the Commerce Department to study and potentially require additional features such as disabling tools or usage-verification methods, with findings due to Congress within one year and approved measures rolled out within two years after that.

Who does it affect?

The bill primarily affects U.S. companies that manufacture or export advanced semiconductors and AI chips already subject to U.S. export controls. Foreign businesses and governments that purchase these chips are also affected, as chips could be monitored for location and usage.

Why does it matter?

The tracking and reporting requirements would create new compliance obligations for chip exporters and expand government visibility into where high-end chips go after sale. Annual reviews of security technology are required for three years following implementation, meaning requirements could continue to evolve and affect the global supply of chips used in data centers, AI systems, and advanced computing products.

Where does it stand?