The Cyberspace Administration of China (CAC) has expressed concern about the recent US proposal to integrate tracking and localization capabilities into advanced chips intended for export. This measure could jeopardize Nvidia‘s sales prospects in the Chinese market, just weeks after the US lifted the export ban on the company’s H20 chips.
In a statement released Thursday, the CAC said it had summoned Nvidia to clarify whether the H20 chip contained potential security risks, specifically the presence of a “backdoor”: a hidden mechanism that can bypass normal authentication or security measures, opening the way for possible unauthorized access. Nvidia, for its part, has categorically denied any risk. A company spokesperson stated:
“Cybersecurity is of paramount importance to us. There are no backdoor mechanisms in Nvidia chips that others can access or remotely control.”
This incident comes amid rising tensions in the tech war between the United States and China. The lifting of the H20 export ban, imposed in April, came after Nvidia designed the chip specifically for the Chinese market, seeking to circumvent restrictions introduced by the United States at the end of 2023 on more advanced AI chips.
Earlier this month, Nvidia’s CEO made an official visit to China, attending numerous public events and meeting with government officials. During the trip, Huang reiterated the company’s commitment to supporting the development of artificial intelligence in the country, seeking to strengthen its relationship with Beijing.
According to Charlie Chai, an analyst at technology research firm 86Research, China’s initiative has more symbolic than practical significance:
“We don’t believe China will impose such severe constraints that it will actually compromise Nvidia’s operations. The lack of alternatives means China still needs Nvidia chips to fuel scientific research and technological development.”
In addition to private companies, Nvidia chips are also essential to state-owned research institutes, universities, and even the military. According to Reuters, last week Nvidia ordered 300,000 H20 chips from its foundry partner, Taiwan Semiconductor Manufacturing Co. (TSMC), to meet strong demand from the Chinese market.
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