Nvidia has denied claims from Chinese state media that its H20 AI chips pose a security risk to China.

The company responded after Yuyuan Tantian, a social media account linked to state broadcaster CCTV, alleged the H20 chips are not advanced or environmentally friendly and could be remotely shut down via a hardware backdoor.

An Nvidia spokesperson told CNBC that its chips do not contain backdoors that would allow remote access or control.

The company last week also rejected similar claims about remote deactivation features in its AI chips.

These accusations come as US-China tensions over semiconductor export controls remain high.

Nvidia resumed sales of its H20 chips in China after earlier US export restrictions, but Chinese state media has characterized the chips as inferior to Nvidia’s top products.

The H20 was developed for the Chinese market following US bans on more advanced Nvidia chips in late 2023.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Export restrictions are accelerating China’s domestic AI chip development

The backdrop allegations against Nvidia’s H20 chips reflect a broader shift in China’s semiconductor strategy driven by US export controls.

Analysts predict Nvidia’s market share in China will decline from 66% to 54% by 2025, with Chinese firms like Huawei and Cambricon capturing increased market share 1.

More significantly, the localization ratio of China’s AI chip market is forecast to increase from just 17% in 2023 to 55% by 2027 1.

This shift indicates that US export restrictions, rather than weakening China’s AI capabilities, are promoting domestic innovation and market consolidation around Chinese alternatives.

Companies like ByteDance have already placed orders for 100,000 Huawei Ascend 910b chips, signaling growing confidence in domestic alternatives 2.

2️⃣ Performance gaps between restricted and unrestricted chips are narrowing

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