Nvidia is reportedly testing tracking software as chip smuggling rumors swirl

Nvidia is reportedly in the process of testing innovative software designed to monitor the location of its AI chips, as concerns over chip smuggling into China intensify. According to sources cited by Reuters, this location verification technology will enable Nvidia to determine the geographical whereabouts of its chips. The tracking software not only assesses computing performance but also utilizes communication delays between servers to infer a chip's location. Initially, this technology will be available as an optional feature for customers using the company's Blackwell chips. Recent reports have suggested that AI models from China's DeepSeek have been developed using smuggled Nvidia Blackwell chips. However, Nvidia has dismissed these claims, stating they have not encountered any concrete evidence of such smuggling activities. An Nvidia spokesperson emphasized, "We haven’t seen any substantiation or received tips of ‘phantom datacenters’ constructed to deceive us and our OEM partners, then deconstructed, smuggled, and reconstructed somewhere else. While such smuggling seems farfetched, we pursue any tip we receive." This development comes shortly after Nvidia received approval from the U.S. Government to commence sales of its H200 AI chips to selected clients in China, although this permission does not extend to the newer Blackwell chips.