By Stephen Nellis and Michael Martina
SAN FRANCISCO, Dec 9 (Reuters) - Nvidia has built location verification technology that could indicate which country its chips are operating in, according to sources familiar with the matter, a move that could help prevent its artificial intelligence chips from being smuggled into countries where their export is banned.
The feature, which Nvidia has demonstrated privately in recent months but has not yet released, would be an optional software update that customers
could install. It would tap into what are known as the confidential computing capabilities of its graphics processing units (GPUs), the sources said.
The software was built to allow customers to track a chip's overall computing performance - a common practice among companies that buy fleets of processors for large data centers - and would use the time delay in communicating with servers run by Nvidia to give a sense of the chip's location on par with what other internet-based services can provide, according to an Nvidia official.
"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," Nvidia said in a statement. "This customer-installed software agent leverages GPU telemetry to monitor fleet health, integrity and inventory."
The feature will first be made available on Nvidia's latest "Blackwell" chips, which have more security features for a process called "attestation" than Nvidia's previous generations of Hopper and Ampere semiconductors, but Nvidia is examining options for those prior generations, according to the Nvidia official.
If released, Nvidia's location update could address calls from the White House and lawmakers from both major political parties in the U.S. Congress for measures to prevent smuggling AI chips to China and other countries where their sale is restricted. Those calls have intensified as the Department of Justice has brought criminal cases against China-connected smuggling rings that were allegedly attempting to bring more than $160 million worth of Nvidia chips to China.
But the calls for location verification in the U.S. have also led China's top cybersecurity regulator to call Nvidia in for questioning about whether its products contain backdoors that would allow the U.S. to bypass its chips' security features.
That regulatory cloud came to the fore again this week, after U.S. President Donald Trump said he would allow exports of the Nvidia H200, the most immediate predecessor to its current flagship Blackwell chips, to China. Foreign policy experts expressed skepticism about whether China would allow companies there to purchase them.
Nvidia has strongly denied that its chips have backdoors. Software experts have said that it would be possible for Nvidia to build chip location verification without compromising the security of its offerings.
(Reporting by Stephen Nellis in San Francisco and Michael Martina in Washington; Editing by Thomas Derpinghaus)
