China has asked U.S. chipmaker Nvidia to “comply with requests and provide convincing proof of security,” in a dramatic development that threatens to upend recent progress in U.S.-China tech trade.
The Cyberspace Administration of China (CAC), the country’s powerful internet regulator, raised what it called “serious security issues” tied to Nvidia’s H20 chips, just days after the United States approved their export to China.
The chip in question, the H20, was a redesigned version of Nvidia’s high-end AI hardware, built specifically to comply with Washington’s tightened export restrictions aimed at limiting China’s access to advanced semiconductor technology. After months of regulatory hurdles, the U.S. recently gave the green light, allowing Nvidia to proceed with plans to ship the chip to Chinese clients.
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The approval was viewed as a rare opening in an increasingly closed-off market and a strategic win for Nvidia, which has been caught in the crossfire of U.S.-China tech rivalry.
But in a move that has raised eyebrows across the industry, Beijing suddenly flipped the script. On Thursday, the CAC said U.S. artificial intelligence experts had discovered hidden “back doors” in Nvidia’s chips, including built-in location tracking and remote shutdown functionalities. Without citing the source of these claims or providing any Chinese-led verification, the CAC said the alleged capabilities posed a threat to national security.
“The safety of computing hardware relates to the core of national security,” the CAC said in a statement. The regulator demanded that Nvidia provide detailed explanations and technical documentation to address these “serious concerns.”
The intervention has taken on a sharply political tone. China’s state mouthpiece, the People’s Daily, followed up with an editorial titled “How can we trust you, Nvidia?” warning that so-called “sick chips” had no place in China’s technology systems.
It likened digital infrastructure to sovereign territory and urged Nvidia to meet government demands swiftly. The article also pointed to past disruptions — including malfunctions in Russia’s cyber and satellite systems — as justification for the heightened scrutiny of foreign-made hardware.
In its response, Nvidia denied the accusations unequivocally. “Nvidia does not have ‘back doors’ in our chips that would give anyone a remote way to access or control them,” a company spokesperson told the South China Morning Post.
However, the timing of China’s move has sparked speculation of retaliation. The decision to summon Nvidia and publicize alleged vulnerabilities comes on the heels of a modest diplomatic opening — the U.S. allowing Nvidia to resume some shipments to China. Many observers see Beijing’s shift as part of a broader tit-for-tat strategy, particularly as Chinese companies like TikTok face intensifying pressure in the United States over national security concerns. The parallels between the TikTok saga and this latest action against Nvidia are difficult to ignore.
While China continues to assert it welcomes foreign investment and is committed to further market liberalization, its actions underscore growing skepticism toward American tech giants. Nvidia, one of the few remaining U.S. semiconductor firms permitted to do business in China under strict conditions, now finds itself under attack on both sides — from Washington’s restrictions and Beijing’s mistrust.
This week’s development is especially significant given China’s reliance on Nvidia’s chips for powering artificial intelligence systems and training large language models. The H20 was meant to serve as a workaround — compliant enough to pass U.S. regulations but still advanced enough to remain competitive in China’s AI race.
Now, with the CAC casting doubt over the chip’s integrity, the future of that workaround appears fragile. Nvidia’s position in China is more uncertain than ever, and with Chinese regulators turning increasingly nationalist in tone, the pressure on multinational tech firms to prove their loyalty — or face exclusion — is intensifying.
While many Chinese companies need Nvidia’s graphics processing units to help power computing infrastructure used in artificial intelligence projects, Beijing remains committed to the long-term goal of tech self-sufficiency and reducing the country’s reliance on US and other foreign technologies.
Shares of Nvidia dipped nearly 3% in early trading on Friday, reflecting investor concern over the company’s prospects in a market that once accounted for a quarter of its revenue.
The geopolitical fallout could extend far beyond Nvidia. The episode reinforces the deepening fault lines between the U.S. and China over national security and control of next-generation technologies — from AI to semiconductors.