Government's AI Chip Ambitions by Nvidia and Others - Implications for Unprecedented Surveillance under Trump Administration?
The U.S. government is contemplating a novel approach to secure its AI technology supply chain, with plans to embed GPS or location-tracking technologies directly into advanced AI chips, such as Nvidia GPUs. This initiative forms part of the broader AI Action Plan announced in July 2025, designed to fortify U.S. dominance in AI technology by complementing traditional export controls[1][2][3].
The plan encompasses both software-based and physical tracking mechanisms within the chips themselves. Although these technologies are still under deliberation and development, legislation has been proposed that could mandate certain AI chips to possess location verification capabilities to prevent diversion after export[2].
As for Nvidia, the potential impacts on its stock are multifaceted:
- A positive outcome could materialise if Nvidia is viewed as a critical and secure supplier of AI hardware under tighter U.S. regulation, potentially leading to increased government and allied-nation contracts or preferential treatment for hardware embedded with tracking tech.
- On the flip side, negative or uncertain effects could stem from increased production costs, technical challenges in embedding tracking, or possible resistance from international customers and partners over privacy or sovereignty concerns, which could affect sales in certain markets, such as China where Nvidia’s chips have strong demand despite bans.
This move underscores the growing U.S. governmental efforts to secure AI hardware supply chains, in which Nvidia plays a prominent role. The stock's trajectory could experience volatility, depending on how these policies influence Nvidia’s global business dynamics and regulatory compliance costs in the near term[1][2][3][5].
Notably, Nvidia's stock has seen a significant surge since joining the AKTIONÄR portfolio in mid-March, with a gain of around 50%. The share price also hit a new record high on Monday[6]. Moreover, since the recommendation on 24/25, there has been a return of around 23% on Nvidia's stock[7].
It is worth mentioning that Mr. Bernd Förtsch, the management and majority shareholder of the publisher Börsenmedien AG, holds positions in Nvidia's shares[8]. Furthermore, discussions about the GPS trackers are being spearheaded by Michael Kratsios, an architect of the U.S. AI action plan[9]. Kratsios also emphasised that the U.S. prioritises innovation in its AI regulations[10].
Sources: 1. AI Action Plan 2. Location Verification in AI Chips 3. U.S.-China Tensions and AI Hardware 4. Nvidia's H20 Chips and Chinese Market 5. Nvidia's Regulatory Compliance Costs 6. Nvidia's Stock Hits Record High 7. Nvidia's Stock Return since Recommendation 8. Börsenmedien AG's Holdings in Nvidia's Shares 9. Kratsios Leading Discussions on GPS Trackers 10. Kratsios on U.S. Prioritising Innovation
- The proposed legislation could potentially require Nvidia's AI chips to have location verification capabilities, a move that, if enacted, might influence the company's investing landscape, as it could attract or detract from potential clients, especially in markets with privacy or sovereignty concerns, such as China.
- With the US government's focus on securing AI hardware supply chains and the potential inclusion of tracking technologies in Nvidia GPUs, the finance sector might observe increased interest in Nvidia as an entity that could comply with stringent regulations and garner government contracts, thereby presenting investment opportunities in the technological sector.
