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Sen. Cotton Proposes AI Chip Export Tracking Amid New U.S. Export Controls

The Chip Security Act mandates location verification for exported AI chips, as the Trump administration repeals Biden-era rules and tightens licensing requirements.

An automated robotic arm is gripping a CPU inside of a circuit board factory. Part of a series images of semiconductors and microchips being installed by robots on a mother board. Conceptual 3D designed computer graphics.

Overview

  • Sen. Tom Cotton introduced the Chip Security Act requiring location-tracking systems on exported AI chips to prevent diversion to adversaries like China.
  • The legislation directs the Commerce Department to mandate location verification mechanisms and reporting of tampering or diversion to the Bureau of Industry and Security.
  • The Trump administration confirmed plans to repeal Biden's AI diffusion rule, citing concerns about overcomplexity and stifled innovation.
  • New Trump administration export licensing requirements for chips, including Nvidia's H20 and AMD's MI308, are projected to cost Nvidia $5.5 billion.
  • Nvidia is reportedly planning to release a modified version of its H20 AI chip to adapt to the updated export regulations.