China Warns Again on Security Issues Using Nvidia AI Chips

Chinese authorities again warned local businesses to avoid purchasing Nvidia’s AI chips designed for the local market. The pressure continued to build after US Commerce Secretary Howard Lutnick warned about getting mainland companies addicted to US chips.

Lutnick said the US wants to sell China enough that its developers get addicted to the American technology stack. He also declared the US doesn’t sell China even its third-best stuff. The comments prompted local regulators to press companies to stop buying Nvidia’s H20 processors.

The accelerated push against US AI chips comes just weeks after Nvidia sealed a deal with Washington to receive a licence to restart exports of its H20 chips to the mainland in exchange for paying a 15% levy. Meanwhile, Nvidia, forecasting lower than expected demand, ordered Samsung, Foxconn, and Amkor, which manages advanced chip packaging, to halt production work related to the H20.

In late July, Nvidia told its Taiwan-based contract manufacturer to restart production of the H20 in anticipation of receiving an export licence. After a Chinese regulator claimed US AI experts revealed Nvidia’s chips have mature tracking, location, and remote shutdown features, the company repeatedly insisted its chips have no backdoors allowing remote access.