Chipmaker Nvidia (NVDA) may soon have to add location-tracking technology to its AI chips if a new U.S. bill becomes law. Indeed, a bipartisan group of lawmakers introduced the “Chip Security Act” in the House of Representatives, which would require chipmakers like Nvidia to include features that confirm where their processors are located before being exported. The goal is to stop restricted chips from being smuggled into countries like China, where they can be used for advanced AI development.
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This bill is the result of China’s DeepSeek, which is an AI company that recently launched its powerful R1 model. Despite strict U.S. export controls, it is suspected that DeepSeek may have gotten access to around 50,000 Nvidia H100 chips. Adding to the worries, three Chinese nationals in Singapore were charged with fraud in a case tied to servers that may have included Nvidia chips, which raises more questions about how U.S. technology is ending up in restricted regions.
As a result, this legislation could create new challenges for Nvidia. If passed, the firm would likely need to install extra safeguards on its chips, which could delay shipments or increase production costs. Unsurprisingly, Nvidia has said that it requires all partners to follow export rules. Nevertheless, while demand for Nvidia’s AI chips continues to grow around the world, the company may need to adjust quickly to meet tougher compliance standards.
Is NVDA a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 34 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $164.51 per share implies 22.4% upside potential.
