Chinese concerns over Nvidia’s (NVDA) H20 AI chips are mounting, with Chinese state media now vocalizing its concerns over the company’s chips’ backdoor security. These chips were made for the Chinese market after the U.S. placed export limits on advanced AI hardware in late 2023.
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State Media Raises Security Red Flags
The focus of the concern is security. A social media account linked to state broadcaster CCTV claimed the H20 chips could have hardware “backdoors.” According to these claims, such a feature could allow someone to bypass normal security checks or shut the chips down from a remote location. The same account also said the chips are not advanced in design and are not environmentally friendly.
Other outlets, including People’s Daily, called on Nvidia to give clear proof that the chips are safe to use. These reports reflect China’s broader push to reduce risk from foreign technology and increase local supply in key sectors.
On July 31, the Cyberspace Administration of China asked Nvidia to explain if its H20 chips contained any security risks. Reports cited unnamed American AI experts who said the chips could be tracked, located, and possibly disabled from outside the country.
Nvidia Denies Allegations
However, Nvidia has rejected all of these claims. The company said there are no backdoors in its products. In fact, Chief Security Officer David Reber said a built-in kill switch would be a permanent flaw that no responsible vendor would include.
This dispute comes after the Trump administration blocked sales of H20 chips to China in April. That ban was lifted in July. The outcome matters for Nvidia’s business, as China is a large market for AI hardware.
Is NVDA Stock a Buy?
Based on 38 assigned ratings, Nvidia continues to boast a Strong Buy consensus and an average NVDA stock price target of $186.24. This implies a 1.94% upside from the current price.
