Nvidia Refutes Chinese Security Concerns Over H20 Chip, Says "No Backdoor"

Nvidia issued a direct rebuttal on July 31 (local time) after Chinese authorities raised security concerns regarding its H20 artificial intelligence (AI) chip intended for export to China.

A Nvidia spokesperson stated in a press release that "cybersecurity is extremely important to Nvidia" and emphasized, "Our chips do not contain any 'backdoors' that would allow remote access or control from outside."

Reuters Yonhap News

A backdoor refers to a vulnerability that allows bypassing normal security and authentication features to access an information network.

The H20 chip was developed for export to China after the United States restricted exports of advanced AI chips to China at the end of 2023. In April, the United States banned the export of the H20 chip to China, but reversed this measure in early July.

Earlier that day, the Cyberspace Administration of China summoned Nvidia for a "yuetan" and demanded that the company explain and provide evidence regarding the backdoor security risks of the H20 chip sold in China. "Yuetan" is a type of verbal warning in which Chinese authorities summon companies, institutions, or individuals to point out wrongdoing, urge corrective action, or communicate requirements.

China Central Television (CCTV) explained that this measure is intended to protect the internet and data security of Chinese users and is based on domestic regulations such as the Cybersecurity Law, Data Security Law, and Personal Information Protection Law.

Tilly Zhang, an analyst at Gavekal Dragonomics, said, "Now China can easily bring Nvidia chips to the negotiating table," adding, "China has more internal substitution capability and confidence than before, making it less dependent on foreign technology."

However, Charlie Cai, an analyst at 86Research, noted, "This does not mean that the Chinese government will impose excessively harsh demands or create regulatory barriers to the extent that Nvidia is effectively expelled from the Chinese market," explaining, "China still needs Nvidia chips for domestic research and application sectors."

In after-hours trading on the New York Stock Exchange the previous day, Nvidia's stock price had risen by more than 2% due to Microsoft (MS) and Meta's earnings and expanded AI infrastructure investments. However, on this day, it closed down 0.78% following reports of security concerns raised by Chinese authorities.