Nvidia (NVDA) is pushing back against claims made by the Chinese government that its artificial intelligence (AI) microchips contain a “kill switch.”
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China is accusing Nvidia of embedding a hardware function that can remotely deactivate the microchips and processors it ships to the Asian nation, referring to it as a “kill switch.” Nvidia’s management team was quick to refute the claim, writing in a blog post that “NVIDIA GPUs do not and should not have kill switches and backdoors.”
The blog post is in response to the Cyberspace Administration of China claiming that it needed Nvidia to provide documents about what it called security vulnerabilities in the company’s H20 microchips that are designed for the Chinese market. The regulator in China specifically mentioned “backdoor” security risks and remote deactivation of Nvidia’s processors as part of its request.
Geopolitical Conflict
This latest dust-up is another example of how Nvidia is navigating increasingly tense geopolitical conflicts, notably between the U.S. and China. Nvidia’s AI microchips remain in high demand by countries and companies around the world and they are frequently caught in the middle of political disputes.
U.S. lawmakers have proposed legislation that would require AI chips under export regulations to be equipped with location-tracking systems. The U.S. has also placed export controls on some of Nvidia’s microchips to China, citing national security risks. There are fears that China could use Nvidia’s chips for military purposes.
Is NVDA Stock a Buy?
The stock of Nvidia has a consensus Strong Buy rating among 38 Wall Street analysts. That rating is based on 34 Buy, three Hold, and one Sell recommendations assigned in the last three months. The average NVDA price target of $185.79 implies 4.09% upside from current levels.
