Nvidia's Smart Chips Could Soon Tell On Their Smugglers
Nvidia Corp (NASDAQ:NVDA) has developed new software that can help determine where its chips are being used, aiming to curb the smuggling of its artificial intelligence processors into countries where exports are restricted.
The company designed the tool to let customers monitor chip health and performance while estimating location by measuring communication delays with Nvidia servers.
Nvidia has privately demonstrated the feature but has not released it yet, Reuters reported on Wednesday.
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Company Commentary And Software Capabilities
A Nvidia spokesperson told Benzinga in an emailed statement, “We’re in the process of implementing a new software service that empowers data center operators to monitor the health and inventory of their entire AI GPU fleet. This customer-installed software agent leverages GPU telemetry to monitor fleet health, integrity, and inventory.”
Customers would install it as an optional software tool that uses built-in secure computing features inside its GPUs to track system activity and location signals.
The company plans to roll out the technology first on its newest Blackwell chips, which include stronger security features, and is exploring ways to support older Hopper and Ampere chips.
The U.S. Justice Department arrested two Chinese nationals for allegedly smuggling Nvidia’s H100 and H200 chips into China via intermediaries, fake buyers, and more.
Authorities alleged the operation has run since at least November 2023.
U.S.-China Export Controls And Policy Backdrop
The arrests come as U.S. officials continue tightening enforcement against illegal chip exports, even as some Nvidia models receive limited approval for sale to certain Chinese customers.
Beijing is reportedly moving to limit access to Nvidia’s H200 AI chips, requiring Chinese buyers to obtain approval, despite President Trump approving exports to China.
The restrictions are part of China’s push to curb reliance on foreign chips and boost domestic AI chip production, aiming to triple output by 2026.
NVDA Price Action: Nvidia shares were down 0.17% at $184.66 during premarket trading on Tuesday, according to Benzinga Pro data.
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