US Bill Would Mandate AI Chip Location Tracking to Thwart China and Other Adversaries

NBC News reports: A group of companies that specialize in tracking international shipments of sensitive technologies is backing a Capitol Hill bill that would require America's most powerful AI chips to incorporate stronger security mechanisms aimed at preventing the chips from reaching China and other adversaries. The letter, signed by six companies, says the Chip Security Act (CSA) would increase American chip companies' competitiveness and close key loopholes in the U.S. export control regime. The move clashes with claims from semiconductor lobbying groups that the requirements would constrain America's booming chip industry. Sent to congressional leadership Thursday morning and seen by NBC News, the dispatch instead argues that more robust security verification would assure chip customers and manufacturers that they are abiding by sensitive restrictions on chip sales. The companies argue that the boosted confidence will "lead to increased sales, faster export approvals, larger transactions, greater access to new markets, and more expansive chip deals." Despite U.S. export control laws banning sales of advanced AI chips to certain countries, including China, loopholes in current requirements have allowed billions of dollars' worth of America's best AI chips to be sold to entities in third-party countries that can then forward them to China. In just one case in March, the Justice Department charged three people with conspiring to forward $2.5 billion of AI chips to China. The CSA aims to address those loopholes, mandating that chip exporters better track where advanced chips are sent, via either bespoke location-verification hardware or software that can run on existing hardware. That, bill proponents claim, would ensure that sensitive chips could be sold to countries like Malaysia or Indonesia without fear of further transfer to China... Experts say that because chips perform the advanced computations required for frontier AI systems, cutting off access to the chips is crucial to prevent geopolitical rivals from using AI systems for military or economic purposes. Read more of this story at Slashdot.