Nvidia (NVDA) is pushing back against claims from China that its artificial intelligence chips carry built-in backdoors or kill switches. In a blog post released in English and Chinese, the company’s chief security officer said such features would create dangerous vulnerabilities for hackers and hostile actors. The statement followed a request from the Cyberspace Administration of China for documents about what it called security risks in the H20, a data center chip sold in the Chinese market.
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The timing of the blog post also reflects growing scrutiny in the United States. Lawmakers and the White House have floated proposals that would require advanced chips sold abroad to include location tracking tools to prevent diversion to countries where sales are restricted. While no rules have been finalized, Nvidia said adding secret access functions would harm trust in U.S. technology and weaken digital infrastructure.
Meanwhile, NVDA stock slightly declined in yesterday’s trading session by 0.97%, closing at $178.26.
Smuggling Case Adds Pressure to Nvidia’s China Strategy
Separately, the U.S. Justice Department announced charges against two California residents for allegedly smuggling Nvidia H100 chips and other advanced technology to China without the required export licenses. Prosecutors say the shipments, worth tens of millions of dollars, were routed through Singapore and Malaysia and falsely listed as going to customers there.
The export controls on high-end AI chips have already limited Nvidia’s ability to meet demand in China. The H20 chip, designed to comply with earlier restrictions, generates billions in quarterly sales but was briefly banned from export in April before receiving a waiver in July. Chief executive Jensen Huang has said it is better for U.S. interests if Nvidia’s chips remain the global standard for AI development, including in China.
While the company has not commented beyond the blog post, it remains under pressure from both Washington and Beijing. As it navigates policy restrictions and security concerns, Nvidia faces the challenge of protecting its market position in one of its most important international markets.
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 $185.79. This implies a 4.22% upside from the current price.
