The Chinese Internet Information Office (referred to as the Cyberspace Administration of China) summoned the American chip giant Nvidia on Thursday, citing “security risks”. The Cyberspace Administration of China requested the company to explain any potential security vulnerabilities regarding its H20 artificial intelligence chip designed for the Chinese market.
The Cyberspace Administration of China expressed concerns that the United States’ previous request for high-end export chips to embed location verification and tracking mechanisms could threaten Chinese users’ data security and privacy rights. China suspects that the H20 chip may have location tracking and remote disablement (backdoor) capabilities. Nvidia has not publicly responded to these allegations, nor confirmed the existence of such functionalities.
This move comes just weeks after the U.S. lifted the ban on sales of H20. In April this year, the Trump administration imposed a ban on exporting the product to China, only to reverse its decision in July, allowing Nvidia to resume shipments. The H20 chip is a customized version for the Chinese market following the U.S. tightening control over advanced AI chips at the end of 2023.
In July this year, both Nvidia and AMD announced they had obtained U.S. government shipping permits to resume some sales of AI chips to China. Nvidia’s CEO, Jensen Huang, visited China last month, meeting with various parties and praising China’s AI development, signaling a deepening commitment to the Chinese market.
Just a few days ago, the U.S. and China trade negotiation teams met in Stockholm, leading to speculations of a potential thaw in bilateral economic relations. However, China’s sudden emphasis on cybersecurity risks once again highlights unresolved friction in the technology sector.
Some U.S. lawmakers strongly oppose the resumption of AI chip exports to China, fearing it could bolster China’s military and AI capabilities, posing a threat to national security. Senator Tom Cotton proposed in May that restricted AI chips must include built-in location verification to control technology outflow. The Trump administration claims that allowing Nvidia chips aims to maintain the U.S.’s technological advantage in the AI chip sector.
White House National Economic Advisor Kevin Hassett stated, “One serious risk we must consider is that if China doesn’t buy chips from us, they will innovate and make their own chips. What we least want to see is them outpacing us in the chip race.”
Nvidia received an additional 300,000 orders for H20 last week due to strong demand from Chinese customers, including cloud service providers, research institutions, and some military units. However, if China initiates a formal cybersecurity review or issues purchase restrictions, it could lead to delivery delays, further impacting supply chain cooperation.
China has previously raised cybersecurity concerns regarding American technology products. In 2023, the Cyberspace Administration of China cited security review failures as the reason for prohibiting key infrastructure operators from purchasing Micron products. Official Chinese organizations have also suggested scrutinizing Intel chips.
At the end of last year, China’s State Administration for Market Regulation announced an antitrust investigation into Nvidia for alleged violations during its acquisition of Mellanox in 2020, claiming it may have failed to fulfill commitments related to supplying GPUs and network equipment to the Chinese market.
(Adapted from relevant reports by Reuters)