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NVIDIA’s H20 AI chips face challenges entering China’s AI markets due to ongoing concerns from state media about potential backdoors and security risks. Despite assurances from NVIDIA, the local regulatory environment remains skeptical.
After a lengthy process, NVIDIA received approval in early 2025 for its AI chips to enter Chinese markets. However, this approval is now under scrutiny. A Chinese regulator initiated an investigation into the H20 AI chips to identify any potential security flaws that could be reported to Washington. In August 2025, Reuters reported that CCTV, China’s state broadcaster, claimed the H20 chip was not safe for domestic use due to backdoors.
This isn’t a one-off incident; China has repeatedly raised concerns about the H20 AI chips. The country’s cyberspace watchdog called on NVIDIA to investigate potential backdoors in its products, including surveillance and ‘kill switch’ features. In response, NVIDIA issued a blog post stating they would never integrate such mechanisms into their chips. Nevertheless, Chinese media remains skeptical.
It’s worth noting that the Trump administration hasn’t ruled out implementing backdoors or similar measures in AI chips for export to China. This aligns with the U.S. government’s broader ‘AI action’ plan aimed at maintaining American leadership in technology. However, NVIDIA maintains there are no such measures in their H20 AI chips.
For NVIDIA to sell its substantial inventory in China, it must address these concerns and gain trust from local media and regulators. Despite their PR efforts, the current skepticism suggests a long road ahead for the H20 AI chips in China.
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What challenge did NVIDIA face when trying to enter China's AI markets with its H20 AI chips?
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