Sen. Tom Cotton (R-Ark.) introduced a bill Friday that would require chip exports to have location-tracking systems to prevent American technology from reaching adversaries.
The bill, titled the Chip Security Act, would direct the Commerce Department to require a “location verification mechanism” on artificial intelligence (AI) chips subject to export controls.
Chip exporters would then be required to report to the Commerce Department’s Bureau of Industry and Security (BIS) if their products were diverted from the intended destination or tampered with.
“Expanding access to advanced technology can’t come at the cost of our national security,” Cotton wrote Friday on social platform X. “My Chips Security Act will prevent American chips from falling into the hands of adversaries like Communist China.”
Earlier this week, the Trump administration confirmed it is planning to repeal the Biden administration’s AI diffusion rule, which was announced in January in the final days of former President Biden’s term.
The rule placed caps on chip sales to most countries around the world, except for 18 U.S. allies and partners, and intended to curb foreign competition in the tech development space.
In a statement Wednesday, the BIS called the rule “overly complex, overly bureaucratic” and warned it would stifle American innovation and dominance. David Sacks, the White House AI and crypto czar, later said the rule alienated key U.S. allies and overreached on export control authority.
Several other technology companies from Microsoft to Nvidia urged Trump to loosen the rules in recent months.
The issue raises new challenges for the administration as it grapples with curbing competition from China and ensuring the success of American exporters.
The Trump administration last month rolled out new export licensing requirements for certain chips, including Nvidia’s H20 and AMD’s MI308 models. Nvidia said the rules will cost the company $5.5 billion, and Reuters reported Friday that the chip manufacturer is planning to release a modified H20 AI chip in the wake of the new rules.
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