China raised concerns over potential security risks in Nvidia Corp’s H20 artificial intelligence (AI) chip, casting uncertainty over the company’s sales prospects in China weeks after a US export ban was reversed.
The Cyberspace Administration of China, the country’s Internet regulator, said it was concerned by a US proposal for advanced chips sold abroad to be equipped with tracking and positioning functions.
It said it had summoned Nvidia to a meeting yesterday to explain whether its H20 AI chip had any backdoor security risks, as it was worried that Chinese user data and privacy rights could be affected.
Photo: I-Hwa Cheng, AFP
Nvidia did not immediately respond to a request for comment.
US Senator Tom Cotton in May introduced a bill that would direct the US Department of Commerce to require location verification mechanisms for AI chips subject to export restrictions to curb Chinese access to advanced US semiconductor technology.
Nvidia has been in the crosshairs of US-China relations and Beijing’s move comes shortly after Washington this month reversed an April ban on Nvidia selling the H20 chip to China.
The company developed the H20 chip for the Chinese market after the US imposed export restrictions on advanced AI chips in late 2023.
“Nvidia chips are now dispensable for China. They can be easily put on the negotiating table,” Gavekal Dragonomics (龍洲經訊) analyst Tilly Zhang (張婷婷) said. “China obviously has more courage and domestic substitution capabilities compared to previous years to not rely on overseas technology.”
Nvidia CEO Jensen Huang (黃仁勳) this month embarked on a very public and effusive visit to China, where he sought to demonstrate his commitment to the Chinese market, met with government officials and praised the country’s AI advances.
The cyberspace administration’s statement did not elaborate on what backdoor security risks there could be or say what the Chinese government was considering to do as a result.
86Research Ltd (八六證券研究) analyst Charlie Chai (柴超毅) said Beijing’s warning was most likely a symbolic stance against similar objections made by US authorities.
“However, we do not believe Beijing will make excessively harsh demands or introduce regulatory hurdles that will effectively drive Nvidia out of China — for the lack of alternatives, China still needs Nvidia chips for domestic research and applications,” Chai said.
Nvidia’s products are highly sought after not just by Chinese tech companies, but also by Chinese military bodies, state-run AI research institutes and universities.
The company last week placed an order with contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電) for 300,000 H20 chipsets due to strong demand, Reuters reported.
Nvidia is also facing an antitrust investigation in China. The State Administration for Market Regulation announced late last year it was investigating the chipmaker over suspected contraventions of the country’s anti-monopoly law.
The regulator said Nvidia was also suspected of contravening commitments it made during its acquisition of Israeli chip designer Mellanox Technologies Ltd, under terms outlined in the regulator’s 2020 conditional approval of that deal.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
SinoPac Financial Holdings Co (永豐金控) is weighing whether to add a life insurance business to its portfolio, but would tread cautiously after completing three acquisitions in quick succession, president Stanley Chu (朱士廷) said yesterday. “We are carefully considering whether life insurance should play a role in SinoPac’s business map,” Chu told reporters ahead of an earnings conference. “Our priority is to ensure the success of the deals we have already made, even though we are tracking some possible targets.” Local media have reported that Mercuries Life Insurance Co (三商美邦人壽), which is seeking buyers amid financial strains, has invited three financial
CAUTION: Right now, artificial intelligence runs on faith, not productivity and eventually, the risk of a bubble will emerge,’ TIER economist Gordon Sun said Taiwanese manufacturers turned more optimistic last month, ending a five-month streak of declining sentiment as concerns over US tariffs, currency volatility and China’s overcapacity began to ease, the Taiwan Institute of Economic Research (TIER) said yesterday. The manufacturing business confidence index rose 1.17 points from June to 86.8, its first rebound since February. TIER economist Gordon Sun (孫明德) attributed the uptick to fading trade uncertainties, a steadier New Taiwan dollar and reduced competitive pressure from Chinese producers. Taiwan’s semiconductor industry is unlikely to face significant damage from Washington’s ongoing probe into semiconductors, given the US’ reliance on Taiwanese chips to power artificial
RSS