China's Crackdown on Nvidia H20: A Semiconductor Standoff

Chinese authorities are advising local firms to avoid using Nvidia's H20 processors, especially for government-related tasks, due to security concerns. This comes as Nvidia denies any potential security risks in its chips. The situation underscores the ongoing tensions between U.S. and China over advanced technology exports.

Chinese authorities have taken a firm stance against the use of Nvidia's H20 processors, particularly urging local companies to avoid them for government-related work. Bloomberg News reported that notices have been sent to various firms, discouraging utilization of these less-advanced chips by both state and private enterprises.

This development follows Nvidia's statement in July, denying the presence of 'backdoors' in its products. U.S. President Donald Trump hinted at potentially allowing Nvidia to sell a scaled-down version of its next-generation chip, Blackwell, despite U.S. concerns over China's use of American AI capabilities for military enhancement.

Nvidia's H20, the most advanced chip authorized for sale to China, derives from the company's older Hopper architecture. The Trump administration approved its export last month while negotiating an unprecedented deal involving revenue sharing with Nvidia and AMD over advanced chip sales in China.

(With inputs from agencies.)