The U.S. is reportedly trying to crack down on artificial intelligence chips being shipped to China by placing tracking devices inside the computer servers it believes are at high risk of being diverted from their intended destinations.

In an exclusive report, Reuters said U.S. authorities have placed numerous trackers in shipments of servers, as part of an effort to trace how many are getting past its controls on the export of high-powered processors to countries sanctioned from buying them.

According to the report, the trackers are still being used by the current White House administration under President Donald Trump, in order to build a case against individuals and companies suspected of trying to profit by evading U.S. trade sanctions.

Multiple anonymous sources told Reuters that the devices are often placed in the packaging of shipments from large U.S. server makers, including Dell Technologies Inc. and Super Micro Computer Inc., as well as individual chips sold by Nvidia Corp. and Advanced Micro Devices Inc.

A number of U.S. government agencies are thought to be involved in the effort, including the Bureau of Industry and Security, the Federal Bureau of Investigation and U.S. Homeland Security Investigations.

Reuters said it has been unable to determine exactly when or how the trackers are placed inside server shipments. However, in one case, the devices were discovered inside the packaging of a shipment of Dell servers powered by Nvidia graphics processing units. In another case, it’s said that trackers were even found within the servers.

The report adds that the use of Trojan horse-style tracking devices is not new, with U.S. authorities resorting to similar tricks in order to prevent illegal exports of aircraft parts. When Edward Snowdon released hundreds of documents on the National Security Agency’s PRISM surveillance program in 2014, one of the bombshells was that the government often inserts “backdoor surveillance tools” inside routers and other computer hardware before they’re shipped to foreign countries.

The U.S. first introduced prohibitions on the sale of AI chips to China in 2022, citing national security fears and the need to curb the technological development of the Chinese military. Russia has been slapped with similar sanctions due to its invasion of Ukraine. In addition, the U.S. is also motivated to try to slow down China’s efforts to develop its own chipmaking industry.

The trackers are not always successful. According to Reuters, chip smugglers have begun routinely checking shipments of servers from Dell and Supermicro and have sometimes removed them from the packaging. The report adds that some of the largest devices were approximately the same size as a smartphone.

When approached for comment, Dell said in a statement that it is “not aware of a U.S. government initiative to place trackers in its product shipments.” Supermicro told Reuters bluntly it does not discuss its “security practices and policies in place to protect our worldwide operations, partners and customers.” Nvidia went further, stressing that “we don’t install secret tracking devices in our products,” while AMD refused to comment on the report.

Although the reports have not been confirmed, Constellation Research Inc. analyst Holger Mueller said they are most likely to be true, because tracking of sensitive exports such as advanced chips is a significant challenge.

“The technology is available and getting smaller, and it can be helpful to those agencies trying to prevent illegal exports,” Mueller said. “It just means a more complicated game of ‘cat and mouse’ between the agencies trying to enforce the rules and those groups that are focused on getting past the restrictions.”

Despite the restrictions, the Trump administration recently made a deal with China that allows it to obtain some AI chip products that have been deliberately throttled. As part of that arrangement, Nvidia and AMD have agreed to pay the government 15% of their revenues from Chinese chip sales.

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