Six companies back a U.S. Capitol Hill bill requiring AI chip location tracking to prevent smuggling to China, arguing it will boost sales and close export-control loopholes.

What happened: Six companies specializing in international shipment tracking signed a letter supporting the Chip Security Act (CSA), which would require America's most powerful AI chips to incorporate location-verification hardware or software. The bill aims to prevent chips from reaching China and other adversaries, and the House Foreign Affairs Committee unanimously approved it 42-0 in late March.

Why it matters: Despite U.S. export controls banning advanced AI chip sales to certain countries, billions of dollars' worth of American chips have reached China through third-party countries—in one case this March, the Justice Department charged three people with conspiring to forward $2.5 billion（約4000億円） of AI chips to China. The six companies argue that stronger verification would assure customers and manufacturers of compliance, which they claim will lead to increased sales, faster export approvals, larger transactions, and broader market access. However, the Semiconductor Industry Association and some semiconductor companies oppose the bill, saying it would unduly restrict foreign sales.

What to watch: The CSA remains under review in the wider House, while the Senate's companion legislation remains in the first stages of consideration. Nvidia announced in December that it has developed technology that could fulfill some of the CSA's requirements. At the end of May, the Commerce Department announced it was closing a potential loophole that had allowed companies to sell advanced AI chips to subsidiaries of Chinese companies in third-party countries.