Nvidia claps back against Chinese accusations its H20 chips pose a security risk

Chip giant Nvidia pushed back Sunday in response to allegations from Chinese state media that its H20 artificial intelligence chips are a national security risk for China.

Earlier in the day, Reuters reported Yuyuan Tantian, an account affiliated with Chinese state broadcaster CCTV, said in an article published on WeChat that the Nvidia H20 chips are not technologically advanced or environmentally friendly.

"When a type of chip is neither environmentally friendly, nor advanced, nor safe, as consumers, we certainly have the option not to buy it," the Yuyuan Tantian article reportedly said, adding that the article said chips could achieve functions including "remote shutdown" through a hardware "backdoor."

In response, a Nvidia spokesperson told CNBC that "cybersecurity is critically important to us. NVIDIA does not have 'backdoors' in our chips that would give anyone a remote way to access or control them."

Nvidia on Tuesday similarly rejected Chinese accusations that its AI chips include a hardware function that could remotely deactivate the chips, also known as a "kill switch."

Tensions between the U.S. and China on semiconductor export controls have escalated in recent weeks, even after Nvidia resumed sales of its H20 chip to China. Chinese state media has framed the H20 chip as inferior and dangerous compared to Nvidia's other chips, while the company has defended its chips.

The company's resumption of its H20 shipments reversed a previous ban on H20 sales that was placed in April by the Trump administration. Nvidia's H20 chips — a less-advanced semiconductor compared to its flagship H100 and B100 chips, for example — were developed by Nvidia for the Chinese market after initial export restrictions on advanced AI chips in late 2023.

U.S. export controls on some Nvidia chips are rooted in national security concerns that Beijing could use the more advanced chips to gain an advantage broadly in AI, as well as in its military applications.

Chinese officials, meanwhile, are pushing for the U.S. to ease export controls on high-bandwidth memory chips as part of a trade deal before a possible summit between U.S. President Donald Trump and Chinese President Xi Jinping, the Financial Times reported on Sunday, citing people familiar with the matter.

Nvidia CEO Jensen Huang has supported Trump's policies while also lobbying for export licenses for the H20 AI chip. Huang has said he wants Nvidia to ship more advanced chips to China, underscoring his outspoken stance that Nvidia's chips becoming the global standard for AI computing is ultimately better for the U.S. to retain market dominance and influence over global AI development.

China is among Nvidia's largest markets. Nvidia took a $4.5 billion writedown on its unsold H20 inventory in May and has warned that its topline guidance for the July quarter would have been higher by $8 billion without the chip export restrictions.

Nvidia shares were up 1% to close at $182.70 on Friday and are up 36% this year.