US accused of being a 'surveillance empire' by China, due to tracking chips in technology products
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In the year 2025, US-China relations have reached a new peak in tech and trade tensions. The focus is on securing semiconductor supply chains and AI technologies, with the escalations affecting various sectors, including GPS tracking for high-value shipments.
The US has imposed aggressive tariffs and export restrictions on advanced technologies, including semiconductors, with duties reaching up to 125%. These measures are aimed at protecting intellectual property, securing supply chains, and controlling critical tech infrastructure. China, in response, has retaliated with matching tariffs [1][2].
The US authorities have begun embedding location-tracking devices onto server shipments to monitor their movement. This move is part of strategic export restrictions on advanced tech, aimed partly to mitigate risks associated with hardware potentially used in security-sensitive applications, such as GPS tracking of shipments [1][2][4].
Chinese government officials have raised alarm bells about the security risks of tracking tech, backdoors, and kill switches in Nvidia's H20 accelerators. The Matrix metaphor, comparing the US's use of location-tracking devices to the machines from the film, suggests that while the US presents free trade, surveillance is built into its AI chips, according to Chinese state media [5].
Meanwhile, Nvidia's chief security officer, David Reber Jr, has written a blog post denying any plans to embed backdoors and kill switches into chips. The tables have now turned, and it seems the US is not implementing a sales ban or mandate for kill switches on Nvidia's H20 accelerators [6].
The US was previously accusing Chinese telecommunications and IT giant Huawei of building backdoors into its equipment under Beijing's direction. The Chinese CCTV network is named Skynet, which is also the name of the malicious AI from The Terminator bent on exterminating the human race [7].
Xinhua, a state-run outlet, published a comment accusing the US of viewing trade as another theater for covert operations. Several US lawmakers have proposed legislation that would require American chipmakers to implement location verification functionality to prevent sensitive electronics like GPUs from being shipped to countries of concern, particularly China [8].
Despite the tensions, Chinese government officials have issued letters discouraging the use of Nvidia's H20 accelerators for AI applications, particularly those involving government or national security related work. However, these letters may have been more about convincing the US not to reinstate a sales ban or mandate kill switches, rather than promoting domestic alternatives [9].
On the other hand, Tencent, one of China's tech giants, doesn't need to buy American GPUs, as it already has all the chips it requires. The US authorities have given Nvidia and AMD the green light to resume shipments of their China-spec H20 and MI308 accelerators [3].
China’s rollback of export restrictions on critical rare earth minerals for semiconductor manufacturing reflects attempts to keep its tech sector resilient despite US pressure [4]. The US and China's tech rivalry is far from over, with US lawmakers considering updating ancient export control IT systems [10].
[1] US-China tech war intensifies as US imposes 125% tariffs on Chinese semiconductors
[2] China retaliates with matching tariffs on US tech imports
[3] US-China tech war: Companies shift supply chains away from China
[4] China eases export restrictions on rare earth minerals for semiconductors
[5] Chinese state media compares US location-tracking to The Matrix
[6] Nvidia denies plans to embed backdoors and kill switches in chips
[7] China's CCTV network named Skynet, raising concerns
[8] US lawmakers propose legislation to prevent sensitive tech exports to China
[9] Chinese government letters may have been more about convincing US than promoting domestic alternatives
[10] US lawmakers consider updating ancient export control IT systems
