US chipmaker Nvidia is confronting a surge in distrust among Chinese consumers and authorities over its H20 artificial intelligence processors. The company recently secured a license from Washington to export these custom-made chips, through an agreement that requires it to pay 15% of its revenues to the US government. Chinese state media responded by characterising the H20 chip as unsafe, urging local buyers to shun it.
Despite Nvidia’s repeated denials of any “backdoor” vulnerabilities, Yuyuan Tantian, associated with state broadcaster China Central Television, voiced deep scepticism. He argued that the chip could not be trusted in light of alleged US government attempts to embed hidden access in hardware. The state-owned outlet asserted: “When a chip is neither environmentally friendly nor advanced or safe, as consumers, we certainly have the option not to buy it.” It warned that the H20 might be vulnerable to remote control via hardware and software exploits, invoking past American efforts—such as a 1992 surveillance initiative—and a proposed bill from May that would require chipmakers to include tracking features.
NVIDIA’s denial and the export licence
In response, Nvidia’s chief security officer, David Reber Jr, emphasised in a blog post last week: “There are no back doors in Nvidia chips. No kill switches. No spyware.” The allegations from Chinese state media surfaced as the US Department of Commerce commenced issuing export licences for the H20 chips. According to the Financial Times, Nvidia and its rival, Advanced Micro Devices, agreed to hand over 15% of their revenue from Chinese chip sales to the US government under a pact forged during the Trump administration. This deal has raised concerns in Beijing.
These developments reflect Nvidia’s difficulties in building trust in China, which accounted for 13 per cent of the company’s total revenue in the last financial year, even as technological tensions between Washington and Beijing escalate.
Ongoing scrutiny and domestic pressure
Last month, the Cyberspace Administration of China (CAC) summoned Nvidia to discuss risks around potential tracking and remote-control capabilities tied to the H20 chips. In an opinion piece this month, the People’s Daily—the official newspaper of the Central Committee of the Communist Party—questioned the company’s credibility under the headline “How can we trust you, Nvidia?”, urging the US firm to substantiate its security claims to regain Chinese consumer confidence.
Nvidia reiterated that it “does not have ‘back doors’ in our chips that would give anyone a remote way to access or control them.” The H20 GPU, launched last year, was explicitly designed to meet US export restrictions while supplying the Chinese market. The recent lifting of a US sales ban has reopened access to these chips, potentially offering China’s AI development a short-term boost. However, this comes amid intensified scrutiny from Beijing and a growing push from local companies such as Huawei Technologies to rely on domestic chip solutions.
Chinese semiconductor research firm ICwise commented that the CAC’s review also served to remind domestic firms not to depend excessively on a single chip and to remain prepared with alternatives. The firm suggested that China’s interest in the H20 may diminish over time as its indigenous chip industry strengthens. The ICwise note has since been removed.
