China Questions Nvidia’s H20 AI Chip Over Security Concerns
China has raised security concerns about Nvidia H20 artificial intelligence chip, just weeks after the US reversed a ban on its sale to the Chinese market. The Cyberspace Administration of China (CAC), the country’s internet watchdog, said it was worried the chip could pose backdoor risks and compromise user privacy.
These concerns add fresh uncertainty to Nvidia’s operations in China, where the company has already faced challenges due to ongoing tensions between the US and Chinese governments.
CAC Summons Nvidia Over Chip Security
On Thursday, CAC summoned Nvidia for a meeting to discuss whether the H20 chip could pose hidden security risks. The regulator is especially alarmed by a US proposal that would require AI chips sold overseas to include location tracking features.
While the CAC did not specify what actions it might take, it expressed concern that such features could affect data security and user privacy in China. Nvidia has not yet responded to media requests for comment.
In May, US Senator Tom Cotton introduced legislation aimed at limiting China’s access to advanced chips. The bill proposes location verification systems for chips covered by export controls.
Nvidia H20 Chip Developed for China Amid Export Restrictions
Nvidia’s H20 chip was designed specifically for the Chinese market after Washington imposed restrictions on advanced chip exports in 2023. Although a ban on H20 sales was enacted in April this year, the US government reversed it in July, allowing shipments to resume.
Demand for the chip remains high. According to Reuters, Nvidia recently placed an order for 300,000 H20 units, underscoring strong interest from Chinese customers, including tech firms, research bodies, and even military institutions.
CEO Jensen Huang visited China last month, meeting with officials and publicly praising the country’s AI development. The visit was seen as an effort to strengthen Nvidia’s ties with China amid rising scrutiny.
Previous Tech Crackdowns and Antitrust Probe
China has a history of targeting US tech firms over security issues. In 2023, the government banned key infrastructure operators from buying from US memory chipmaker Micron, citing serious risks.
Earlier, the Cybersecurity Association of China called for a review of Intel’s products. However, regulators have not made public moves in response to that suggestion.
Nvidia is also under investigation by China’s State Administration for Market Regulation for suspected violations of the country’s anti-monopoly laws. The probe relates to Nvidia’s acquisition of Mellanox Technologies, approved in 2020 under specific conditions.
With multiple regulatory challenges now facing Nvidia in China, the future of its operations in the world’s second-largest economy remains uncertain.
with inputs from Reuters
