Nvidia about to disrupt global chip smuggling: Here’s how

Nvidia has developed a cutting-edge location verification technology, helping the US chipmaker giant to locate the chips and accelerate anti-smuggling crackdown against the countries where AI-powered chips’ export is banned.

According to Reuters, the tracking technology would be an optional software update that customers could install. By utilizing the software, the customers can know about the confidential computing capabilities of GPUs (graphic processing units). However, Nvidia has not yet released the software update.

As per an Nvidia official, the software allows customers to monitor a chip’s overall computing performance. Moreover, it also leverages time delay in server communication to assess the chip’s location with precision as compared to other internet services.

"We are in the process of implementing a new software service that empowers data center operators to monitor the health and inventory of their entire AI GPU fleet. This customer-installed software agent leverages GPU telemetry to monitor fleet health, integrity and inventory, Nvidia issued a statement.

According to details from an Nvidia official, the location verification feature is expected to be first available on Nvidia’s latest cutting-edge “Blackwell” chips which possess more security features for attestation than Hopper and Ampere semiconductors. 

However, the company will also explore the options for these semiconductors as well.

The software update is a response to intensified calls from the White House and bipartisan US lawmakers to curb the smuggling of Nvidia’s AI chips to China and other countries.

Moreover, the news also came on the heels of Department of Justice criminal cases against China-related smuggling networks, which reportedly attempted to smuggle $160 million worth of Nvidia chips to China.

However, the introduction of the verification system has prompted China’s top cybersecurity regulator to question Nvidia about its chips containing backdoor, allowing the US to evade security features. Nvidia has rejected these allegations.

Earlier this week, US President Donald Trump gave a green light to exporting Nvidia H200 chips to China.