US embeds trackers in AI chip shipments to catch diversions to China, sources say

U.S. authorities have secretly placed location tracking devices in targeted shipments of advanced chips they see as being at high risk of illegal diversion to China, according to two people with direct knowledge of the previously unreported law enforcement tactic.

The measures aim to detect AI chips being diverted to destinations which are under U.S. export restrictions, and apply only to select shipments under investigation, the people said.

They show the lengths to which the U.S. has gone to enforce its chip export restrictions on China, even as the…