Beijing may have disrupted Nvidia’s plans to make a comeback in China’s AI market. According to The Information, Nvidia has instructed its component suppliers to stop production related to its H20 AI chip.
This production halt follows reports that Beijing warned Chinese companies against using these chips due to potential security issues. Officials are concerned about fears of backdoors that could give the U.S. access to sensitive data. China’s government is now urging companies to use domestic chips instead.
This development comes just one month after Nvidia and other companies were given approval to start selling AI chips specifically designed for China’s market.
An Nvidia spokesperson provided a statement addressing the situation. The company stated it constantly manages its supply chain to address market conditions. They emphasized that cybersecurity is critically important and that Nvidia does not have backdoors in its chips that would give anyone remote access or control. The spokesperson expressed confidence in the H20 chip, stating the market can use it with confidence.