Nvidia is reportedly testing new software that can track the physical location of its AI chips, as concerns grow over reports that its advanced processors are being smuggled into China.

The company has developed location-verification technology that can detect which country a chip is operating in, Reuters reported, citing unnamed sources. The system monitors computing performance, and the communication delays between servers can provide clues about the chip’s geography. The feature will be optional for customers and is expected to debut with Nvidia’s next-generation Blackwell chips.

The reports come as speculation intensifies that China’s DeepSeek AI models were trained using Nvidia Blackwell chips obtained through smuggling networks. Nvidia has rejected the claims, saying it has no evidence its hardware is being illicitly diverted.

“We haven’t seen any substantiation or received tips of ‘phantom data centers’ constructed to deceive us and our OEM partners, then deconstructed, smuggled, and reconstructed somewhere else. While such smuggling seems far-fetched, we pursue any tip we receive,” an Nvidia spokesperson told TechCrunch.