China has raised security concerns about NVIDIA’s H20 chips, prompting the company to deny the presence of backdoors, kill switches, or monitoring software. NVIDIA emphasized that “these are never the way to build trusted systems, and never will be.”
The controversy erupted after the U.S. approved H20 chip sales to China in July 2025, only for Chinese authorities to subsequently question the chips’ security risks and summon NVIDIA officials for discussions.
According to AI expert Guo Tao, NVIDIA faces a core dilemma of “proving innocence” amid technical barriers and trust deficits. The closed nature of chip design prevents external oversight, while corporate promises alone cannot satisfy national security review requirements. The H20 chip, already viewed as a customized “defective product” under U.S. export controls, now faces intensified market doubts about its security and reliability.
During this geopolitically sensitive period, government and enterprise users increasingly prefer risk-avoidance strategies, including choosing domestic chip solutions or reducing NVIDIA purchases. To reverse this trend, NVIDIA may need to open technical documentation for third-party audits or secure endorsement from international authorities.
Beijing Academy of Social Sciences researcher Wang Peng noted that while NVIDIA’s statement denies security risks, it lacks technical evidence. The Cyberspace Administration of China has requested detailed explanations and proof, requiring technical audits, code reviews, or third-party verification to build trust.
The security controversy has heightened awareness of the importance of technological self-reliance in China. Medical AI company executive Ding Ming reported his firm is intensifying testing of domestic chips, which can meet company needs in some scenarios, though ecosystem development requires more time.
Industry observer Liang Zhenpeng believes the H20 incident will accelerate domestic GPU adoption in data centers and AI training, encouraging more local enterprises to embrace domestic computing solutions and providing broader market opportunities for Chinese chip companies.
However, experts acknowledge that domestic chips still face performance bottlenecks and ecosystem maturity issues that require collaborative innovation and government support to overcome.
Source: Central News Agency (Taiwan), August 7, 2025
https://www.cna.com.tw/news/acn/202508070190.aspx