Chinese Government Orders Big Tech to Halt NVIDIA H20 AI Chip Purchases, Causing Major Uncertainty for Jensen’s China Strategy

NVIDIA’s H20 AI chips are facing significant purchasing restrictions from major Chinese technology firms due to concerns over potential security vulnerabilities that may involve backdoors linked to the U. S.government.

Restrictions on NVIDIA’s H20 AI Chips in China

The situation for NVIDIA in China is becoming increasingly complex. Following difficulties in obtaining approval from the Trump administration to export their chips to China, it appears that the Chinese government is now imposing its own challenges. According to a report from The Information, top Chinese tech companies, including industry leaders like ByteDance, Alibaba, and Tencent, have been ordered by regulatory authorities to halt their purchases of the H20 AI chip due to these security worries.

Initially, reports suggested that the guidance from regulators would not result in an outright purchase stop; however, recent updates indicate that a formal suspension has been mandated. This unexpected turn of events could lead to significant operational setbacks for NVIDIA, as well as for the Chinese firms that are currently reliant on advanced computing power.

NVIDIA To Generate A Whopping $12 Billion From China Despite Restrictions As H20 AI GPU Sees Massive Demand 1

The reasons behind China’s decision to restrict the acquisition of the H20 chip stem from worries about possible security backdoors that could expose their technology to American surveillance. Concerns include mechanisms for location tracking and a potential ‘kill switch’ that could disable the chip if relations between the user and the U. S.deteriorated. NVIDIA has refuted these claims, asserting that such features are nonexistent; however, skepticism remains among Chinese regulators.

Additionally, relevant to this situation is President Trump’s “AI Action” plan, which outlines that all chips sent to China will inherently contain some form of backdoor, regardless of NVIDIA’s assurances to the contrary. This shift in Chinese policy is particularly notable, given that prior to the introduction of export controls, the H20 AI chip was in high demand in the region. The abrupt change in stance reflects a growing wariness among local authorities about the implications of allowing new technology to enter the market.

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