China Advises Firms Against Nvidia H20 Chips Over Security Concerns

China has issued guidance urging local companies, particularly those involved in government or national security work, to avoid using Nvidia's H20 AI processors due to security concerns. These directives have been sent to state enterprises and private firms, reflecting Beijing's aim to shift towards domestic chip alternatives amid fears that Nvidia's chips might include location-tracking or remote shutdown features, allegations that Nvidia has strongly denied. The move complicates Nvidia's efforts to regain revenue in China, especially after U.S. regulatory measures and congressional proposals, including the 'Chip Security Act,' which aims to require tracking functions on AI chips exported to China. Despite these tensions, U.S. President Donald Trump has indicated he may permit Nvidia to sell a scaled-down version of its next-generation GPU chip to China, a decision that could impact the ongoing U.S.-China technology rivalry. Chinese regulators recently summoned Nvidia for clarifications on security risks associated with the H20 chip, signaling heightened scrutiny. Overall, this development underscores the intensifying technological and geopolitical contest between the U.S. and China over advanced semiconductor technologies.