A new bill introduced in the U.S. Senate is raising alarms in the tech world. On May 9, Senator Tom Cotton proposed the "Chip Security Act," legislation that would mandate location-tracking mechanisms on certain advanced AI chips.

Such mechanisms have reportedly already been found in some U.S. exports.

The bill's stated goal is to tighten export controls and prevent China from acquiring critical semiconductor technology. However, experts warn the move could have far-reaching consequences for global supply chains and digital security.

Trackers are already here

The "Chip Security Act" might seem like a futuristic concept, but the technology it proposes is already in use.

A Reuters report on August 14 revealed that tracking devices have been discovered in products from major U.S. tech companies such as Dell and Supermicro. These tracking mechanisms – often small components embedded on motherboards or within other hardware – have been used for decades in various U.S. exports to monitor their final destinations.

While companies have long used these tools for logistics and inventory management, the new legislation would give the U.S. government explicit authority to use them for national security purposes, potentially turning a logistical tool into a geopolitical one.

Notably, the bill isn't just about knowing where a chip ends up – it also includes provisions for a remote kill switch. This means that, in the future, a U.S. government agency could potentially monitor and even disable a piece of hardware from halfway across the world.

For companies worldwide that rely on U.S.-made chips, this could introduce significant risks. It raises critical questions about data sovereignty, supply chain integrity, and whether consumers truly own the products they purchase.

A pattern of backdoors and surveillance

The idea of the U.S. government mandating hardware-level surveillance is not without precedent.

In the 1990s, the AT&T Clipper chip incident caused a stir. The U.S. government pushed for a "Clipper" chip to be included in all electronic devices, which would have allowed law enforcement to access encrypted communications through a built-in backdoor.

Public backlash over privacy concerns ultimately killed the plan.

More recently, the PRISM surveillance program exposed by Edward Snowden revealed that U.S. intelligence agencies were accessing vast amounts of data from major tech companies through software backdoors, conducting mass surveillance on a global scale.

The "Chip Security Act" represents a worrying escalation. Unlike previous efforts focused on software or communications, this bill targets the very hardware at the heart of the modern world. It sends a clear signal that the U.S. is willing to leverage its technological dominance to maintain a watchful eye on its exports.