Nvidia Under Scrutiny in China Over H20 Chips

Nvidia has denied allegations from China's top internet watchdog that its H20 AI chips—developed specifically for the Chinese market—contain backdoors that enable tracking or remote control.

The Cyberspace Administration of China (CAC) summoned Nvidia representatives to discuss potential national security risks, though it did not disclose specific evidence or sources. Nvidia responded firmly, stating that the chips "do not contain any backdoors or unauthorized remote access features." Despite the denial, Nvidia’s shares dipped 0.8 percent in New York trading following the announcement.

Key Highlights

• China’s CAC questioned Nvidia over alleged backdoor features in its H20 chips
• Nvidia firmly denied the claims, stating the chips have no remote access risks
• The probe reflects rising tech tensions as China balances imports with self-reliance

This inquiry is part of a broader U.S.-China tech standoff. Similar scrutiny has been seen in the U.S., where lawmakers investigated Huawei in 2012 for national security risks tied to its links with the Chinese military. In turn, China banned U.S.-based Micron Technology from its critical infrastructure in 2023 after a failed security review.

The geopolitical landscape grew even more complex following Edward Snowden’s 2013 leaks, prompting China to accelerate efforts to eliminate reliance on foreign tech.

The timing of the H20 probe is notable: Chinese tech giants including ByteDance, Alibaba and Tencent reportedly placed over $16 billion in orders for H20 chips in Q1 2025, while also supporting a domestic semiconductor alliance involving Huawei, Cambricon, and Moore Threads.

Also Read: U.S. Clears Nvidia H20 Chip Exports to China: Strategic Shift

This dual strategy—buying foreign tech while rapidly developing local alternatives—illustrates the difficult balancing act for firms like Nvidia, which face short-term gains but long-term market displacement risk in China.