Beijing has recently summoned Nvidia over alleged security issues with its chips, dealing a blow to the US company’s efforts to revive sales in China. This comes after Washington granted approval for the export of a made-for-China chip, known as the H20 chip.
China’s cyber regulator raised concerns about “serious security issues” with Nvidia’s artificial intelligence chips, claiming that US AI experts had discovered that the chips have location tracking capabilities and can be remotely shut down. As a result, the Cyberspace Administration of China has requested Nvidia to explain the security problems associated with the H20 chip and submit documentation to support their case.
Nvidia has been working to rebuild its business in China following the lifting of a ban on H20 sales by the US government. CEO Jensen Huang visited Beijing to reaffirm the company’s commitment to the Chinese market and introduced a new graphics processing unit based on the latest Blackwell series to comply with US export controls.
However, China’s announcement has raised skepticism among experts, with some questioning the lack of detail provided. Lawmakers in Washington have also expressed concerns about chip smuggling and introduced a bill that would require chipmakers like Nvidia to embed location tracking into export-controlled hardware.
In response to the situation, Beijing has encouraged major Chinese tech companies to increase purchases of domestic AI chips in order to reduce reliance on Nvidia and support the growth of a domestic chip ecosystem. This push has benefited companies like Huawei, Biren, and Cambricon.
Nvidia has stated that it would take approximately nine months from restarting manufacturing to shipping the H20 chip to clients. However, there is uncertainty among Chinese customers about whether they will receive their orders if the US reverses its decision to allow the sale of the chip.
The controversy surrounding the H20 chip sales has sparked debate on both sides of the Pacific, with concerns about its potential impact on Chinese AI development and US national security. Despite the challenges, Nvidia remains committed to addressing the security issues raised by China and continuing its operations in the Chinese market.
