Why the U.S. Chip Security Act raises alarms

Editor's note: Jessica Durdu, a special commentator on current affairs for CGTN, is a foreign affairs specialist and PhD candidate in international relations at China Foreign Affairs University. The article reflects the author's opinions and not necessarily the views of CGTN.

Recent revelations about troubling security risks related to U.S.-made H20 chips have sparked growing public concern. Allegations, particularly from Chinese regulators, suggest that these chips may house "backdoors" or other mechanisms enabling unauthorized access. At the same time, Congress is advancing the so-called Chip Security Act, which would obligate domestically manufactured export‑controlled chips to incorporate location‑tracking modules, ostensibly to prevent diversion or smuggling. Complementing this, U.S. intelligence insights suggest that AI chips produced in the United States may already integrate on‑chip features for license locking, usage monitoring, and other usage restrictions. Together, these developments pose a troubling question: Are we witnessing legitimate security policies, or the overextension of state power by using the name of security?

The Chip Security Act's intent is clear: To deter unauthorized transfers of advanced semiconductors, especially to strategic competitors. Introduced in May 2025, the bill would require the Commerce Department to mandate location verification capabilities on export‑controlled chips within 180 days of enactment, and to require companies to report any suspected diversions. While rooted in legitimate national security concerns, imposing embedded tracking on hardware raises distinct risks. Major cybersecurity analysts warn that these mechanisms could themselves become attack vectors, compromising the very systems they aim to protect.

Meanwhile, mounting scrutiny of H20 chips has added fuel to public anxiety. Chinese authorities have summoned leading tech firms, ByteDance, Tencent, and Baidu, among others, to explain their reliance on H20 chips, citing risks including possible backdoors and information security vulnerabilities. Media outlets affiliated with China's cyberspace regulator have even labeled H20 chips as unsafe, technologically inferior, and environmentally unfriendly, recommending that they be excluded from government and sensitive‑sector use.

On the U.S. side, firms like Nvidia strongly deny any embedded surveillance capabilities. Nvidia's Chief Security Officer David Reber has publicly declared that GPUs, especially the H20, lack "kill switches," backdoors, or other remote‑control features, warning that such designs would undermine trust in U.S. technology. Their stance echoes broader industry pushes for openness and assurance against opaque state control.

But beyond the rhetorical tug‑of‑war, there's a critical principle at stake: National security must not become a carte blanche for unchecked surveillance. It is vital to recognize that a rules‑based, rights‑respecting approach can coexist with prudent export control. If every advanced chip carries embedded tracking, we risk eroding trust, not just abroad, but among U.S. allies and private-sector partners. Sensitive infrastructure and commercial systems might fall prey to espionage if hardware is designed to monitor users or be remotely disabled.

Furthermore, recent practices like embedding physical trackers in chip shipments underscore that location-based enforcement can occur without putting surveillance into the chip itself. Real-world deployment of discrete trackers in shipping shows that controlling distribution and enforcing compliance does not necessarily mandate intrusive hardware design.

The debate over chip security and backdoors is not just about deterrence, it's about the boundaries of state power. A well-crafted rules-based framework can preserve both security and trust. The United States should resist policies that conflate prudent export control with hardware surveillance, and instead champion measured, transparent, and privacy-respecting solutions. Technology competition with China should remain rooted in innovation and fair rules, not backdoors. Only then can the U.S. maintain both its security interests and its position in ethical governance.

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com. Follow @thouse_opinions on X, formerly Twitter, to discover the latest commentaries in the CGTN Opinion Section.)