Nvidia Unveils New AI Chip Tracking Software Amid Smuggling Fears

Nvidia is developing new location tracking software for its AI chips at a time when concerns about smuggling and unauthorized use in China are escalating. 

According to multiple reports, the company has created location verification technology capable of identifying the country where a chip is operating by measuring computing performance and analyzing delays in communication between servers, which can reveal geographic distance. The feature draws on the confidential computing capabilities built into Nvidia’s advanced GPUs and is expected to debut as an optional service for customers using Blackwell chips, the company’s newest generation of high-performance AI hardware. Nvidia says the service is also designed to help data center operators monitor the health and inventory of their AI GPU fleets, although its location verification abilities have become the focus due to increasing scrutiny over global chip movement (TechCrunch).

The push for tracking comes amid rising allegations that Nvidia chips are being smuggled into China despite strict US export controls. Reports claim that China’s DeepSeek AI models were trained using smuggled Nvidia Blackwell chips, a claim Nvidia firmly disputes. The company maintains that it has seen no evidence that chips have been funneled through so-called phantom data centers built to mask illegal exports, dismantled for shipping, and rebuilt inside China. Nvidia emphasized that although such schemes sound unlikely, it investigates every tip it receives and has not substantiated any of the recent accusations. The speculation reflects broader concerns about China’s access to top tier AI hardware, especially given how essential Nvidia GPUs have become for training large scale AI systems (pcgamer).

These developments follow a recent decision by the US government allowing Nvidia to sell its older H200 AI chips to approved customers in China. The authorization does not include Blackwell chips, which remain restricted due to their cutting edge capabilities and the strategic value they hold in advancing AI research and development. As a result, the Blackwell line has become the center of geopolitical tension, with the US working to limit China’s access and Nvidia seeking to comply with regulations while managing global customer demand. The introduction of tracking technology could help Nvidia maintain tighter oversight of where its most advanced chips ultimately operate, reducing the risk of unauthorized transfers and strengthening its compliance posture (Yahoo).

Although Nvidia has not officially confirmed the full scope of the new tracking features, its statements suggest a broader strategy to increase transparency and control across its GPU ecosystem. By leveraging server communication delays and confidential computing hardware, the company aims to create a system that gives operators insight into chip deployment without interfering with performance or customer autonomy. The software will remain optional, but its availability may reassure regulators and partners who are increasingly concerned about illicit chip routing and the rapid acceleration of AI capabilities worldwide.

As Nvidia continues to navigate the intersection of technological innovation, global demand for AI hardware, and geopolitical pressure, the rollout of this tracking software could mark a significant shift in how chip manufacturers monitor high value computing assets. With AI development intensifying across sectors and countries, the ability to verify where advanced chips are operating may become a crucial tool for maintaining compliance and safeguarding the industry’s most powerful resources.

This article was written by the Covertly.AI team. Covertly.AI is a secure, anonymous AI chat that protects your privacy. Connect to advanced AI models without tracking, logging, or exposure of your data. Whether you’re an individual who values privacy or a business seeking enterprise-grade data protection, Covertly.AI helps you stay secure and anonymous when using AI. With Covertly.AI, you get seamless access to all popular large language models - without compromising your identity or data privacy.

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Works Cited

TechCrunch. “Nvidia Is Reportedly Testing Tracking Software as Chip-Smuggling Rumors Swirl.” TechCrunch, 10 Dec. 2025, https://techcrunch.com/2025/12/10/nvidia-is-reportedly-testing-tracking-software-as-chip-smuggling-rumors-swirl/.

Yahoo Finance. “Nvidia Reportedly Testing Tracking Software That Could Monitor AI Chips.” Yahoo Finance, 2025, https://finance.yahoo.com/news/nvidia-reportedly-testing-tracking-software-220647635.html.

PC Gamer. “Nvidia Has Built Location Tracking Tech That Uses the ‘Confidential Computing Capabilities’ of Its AI Chips to Prevent Smuggling, According to a Reuters Report.” PC Gamer, 2025, https://www.pcgamer.com/hardware/graphics-cards/nvidia-has-built-location-tracking-tech-that-uses-the-confidential-computing-capabilities-of-its-ai-chips-to-prevent-smuggling-according-to-a-reuters-report/.

Atlin, Ben. "Nvidia’s AI Gold Rush: Hyperscalers Pour Billions Into Chip Maker." Wall Street Pit, 3 Nov. 2024, https://wallstreetpit.com/120044-nvidias-ai-gold-rush-hyperscalers-pour-billions-into-chip-maker/.

NVIDIA. "NVIDIA Blackwell Platform Arrives to Power a New Era of Computing." NVIDIA Newsroom, 18 Mar. 2024, https://nvidianews.nvidia.com/news/nvidia-blackwell-platform-arrives-to-power-a-new-era-of-computing.

Sunil, Nileena. "Nvidia Unveils Location-Tracking Safeguards to Block Chip Smuggling." The American Bazaar, 10 Dec. 2025, https://americanbazaaronline.com/2025/12/10/nvidia-unveils-location-tracking-safeguards-to-block-chip-smuggling-471356/.