China’s cyberspace regulator questions Nvidia over AI chip privacy risks

[BEIJING] China’s cyberspace regulator said that it has asked US semiconductor maker Nvidia to explain whether its H20 artificial intelligence (AI) chips have any backdoor security risks.

The Cyberspace Administration of China said that it met with Nvidia on Thursday (Jul 31) after US lawmakers called for advanced chips sold abroad to be equipped with tracking and positioning functions.

The regulator said that the matter raised concerns over the potential impact on Chinese user data and privacy rights.

Nvidia did not immediately respond to a Reuters request for comment.

In May, US Senator Tom Cotton introduced a bill that would direct the Commerce Department to require location verification mechanisms for AI chips subject to export restrictions, to curb Chinese access to advanced US semiconductor technology.

Nvidia developed the H20 chip for the Chinese market after the US imposed export restrictions on advanced AI chips in late 2023. The chip has had a turbulent path to market amid shifting regulatory policies.

The US this month reversed an April ban on Nvidia selling the H20 to China.

Reuters reported this week that Nvidia had placed orders for 300,000 H20 chipsets with contract manufacturer Taiwan Semiconductor Manufacturing Company, with one source saying strong Chinese demand had prompted the US company to abandon plans to rely solely on existing inventory.

Nvidia is also facing an antitrust investigation in China. The State Administration for Market Regulation announced late last year that it was probing the chipmaker over suspected violations of the country’s anti-monopoly law.

The regulator said that Nvidia was also suspected of violating commitments it made during its acquisition of Israeli chip designer Mellanox Technologies, under terms outlined in the regulator’s 2020 conditional approval of that deal. REUTERS