After the lifting of the export ban on H20 chips to China, NVIDIA faces new challenges related to security and local market competition.
Lifted Ban on H20 Chips for China
In July 2023, the United States lifted the ban on exports of NVIDIA's H20 chips to China. This model was designed to comply with export restrictions on advanced AI chips. The reversal came after negotiations, including CEO Jensen Huang's meeting with then-President Donald Trump. However, details remain unclear regarding the number of licenses and approved customers.
China Questions Security
The return to the market faced challenges. In late July, China's cyberspace watchdog summoned NVIDIA representatives to discuss "serious security issues" with the H20 chips. They demanded explanations about potential vulnerabilities. NVIDIA stated that its chips do not have hidden access, and security is a priority.
State Media Criticism of NVIDIA
In early August, the situation escalated when a social media account linked to China's state broadcaster CCTV criticized the H20 chips. The post claimed that the chips were neither technologically advanced nor environmentally friendly. This raised public concern and created further obstacles for NVIDIA.
NVIDIA must convince Chinese regulators and consumers of the security of its H20 chips while also navigating U.S. government demands. The future of the company in China depends on its ability to tackle these challenges.
