Nvidia Faces China Probe Over H20 AI Chip Risks

China's Cyberspace Administration (CAC) has summoned Nvidia concerning alleged security vulnerabilities in its H20 AI chips, focusing on tracking, positioning, and remote shutdown capabilities that may threaten domestic data privacy. These concerns have emerged after the U.S. reversed its ban on H20 exports to China, and as American lawmakers push for mandatory tracking in overseas AI chips. Nvidia denies any backdoors in the H20 chips, but the regulatory probe from CAC could disrupt the company's efforts to resume sales in China, where it recently wrote down $4.5 billion in unsold inventory. Nvidia has placed additional H20 chip orders with TSMC to meet anticipated Chinese demand, despite heightened scrutiny. Meanwhile, U.S. authorities have penalized Cadence Design Systems for illegally selling chip design software to a Chinese military university, reflecting increased vigilance over tech supply chains. The outcome of China's investigation is likely to shape Nvidia's future in the Chinese market and the broader global AI chip sector.