SINGAPORE/NEW YORK - The US 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 artificial intelligence (AI) chips being diverted to destinations that are under US export restrictions, and apply only to select shipments under investigation, the people said.

They show the lengths to which the US has gone to enforce its chip export restrictions on China, even as the Trump administration has sought to relax some curbs on Chinese access to advanced American semiconductors.

The trackers can help build cases against people and companies who profit from violating US export controls, said the people, who declined to be named because of the sensitivity of the issue.

Location trackers are a decades-old investigative tool used by US law enforcement agencies to track products subject to export restrictions, such as airplane parts. They have been used to combat the illegal diversion of semiconductors in recent years, one source said.

Five other people actively involved in the AI server supply chain said they were aware of the use of the trackers in shipments of servers from manufacturers such as Dell and Super Micro, which include chips from Nvidia and AMD.

Those people said the trackers are typically hidden in the packaging of the server shipments. They did not know which parties were involved in installing them, or where along the shipping route they were put in.

Reuters was not able to determine how often the trackers have been used in chip-related investigations, or when the US authorities started using them to investigate chip smuggling. The US started restricting the sale of advanced chips by Nvidia, AMD and other manufacturers to China in 2022.

In one 2024 case described by two of the people involved in the server supply chain, a shipment of Dell servers with Nvidia chips included both large tracke...