68 Sources
68 Sources
[1]
China claims Nvidia built backdoor into H20 chip designed for Chinese market
Beijing has summoned Nvidia over alleged security issues with its chips, in a blow to the US company's push to revive sales in the country after Washington granted approval for the export of a made-for-China chip. China's cyber regulator on Thursday said it had held a meeting with Nvidia over what it called "serious security issues" with the company's artificial intelligence chips. It said US AI experts had "revealed that Nvidia's computing chips have location tracking and can remotely shut down the technology." The Cyberspace Administration of China requested that Nvidia explain the security problems associated with the H20 chip, which was designed for the Chinese market to comply with US export restrictions, and submit documentation to support their case. The announcement comes as Nvidia is rebuilding its China business after Washington this month lifted a ban on H20 sales to the country. After Washington's U-turn, Nvidia chief executive Jensen Huang visited Beijing to meet officials and customers. He stressed his company's commitment to the Chinese market and introduced a new graphics processing unit based on the latest Blackwell series that is tailored to align with existing US export controls. Paul Triolo, a China tech expert and partner at DGA-Albright Stonebridge Group, said he was "skeptical" about the claims of a deliberate back door being built into Nvidia hardware, pointing to the lack of detail in the announcement.
[2]
Nvidia AI chips worth $1B smuggled to China after Trump export controls
At least $1 billion worth of Nvidia's advanced artificial intelligence processors were shipped to China in the three months after Donald Trump tightened chip export controls, exposing the limits of Washington's efforts to restrain Beijing's high-tech ambitions. A Financial Times analysis of dozens of sales contracts, company filings, and multiple people with direct knowledge of the deals reveals that Nvidia's B200 has become the most sought-after -- and widely available -- chip in a rampant Chinese black market for American semiconductors. The processor is widely used by US powerhouses such as OpenAI, Google, and Meta to train their latest AI systems, but banned for sale to China. In May, multiple Chinese distributors started selling B200s to suppliers of data centers that serve Chinese AI groups, according to documents reviewed by the FT. This was shortly after the Trump administration moved to prevent sales of the H20 -- a less-powerful Nvidia chip tailored to comply with Joe Biden-era curbs. It is legal to receive and sell restricted Nvidia chips in China, as long as relevant border tariffs are paid, according to lawyers familiar with the rules. Entities selling and sending them to China would be violating US regulations, however. Last week, Nvidia chief Jensen Huang announced that the Trump administration would begin to allow the selling of its China-specific H20 chip once more. In the three months beforehand, Chinese distributors from Guangdong, Zhejiang, and Anhui provinces sold Nvidia's B200s, as well as other restricted processors such as the H100 and H200. According to contracts reviewed by the FT and people with knowledge of the transactions, the total sales during this period are estimated to be more than $1 billion. Nvidia has long insisted there is "no evidence of any AI chip diversion". There is no evidence that the company is involved in, or has knowledge of, its restricted products being sold to China. "Trying to cobble together data centers from smuggled products is a losing proposition, both technically and economically," Nvidia told the FT. "Data centers require service and support, which we provide only to authorized Nvidia products." "The new century of a smart China" One Anhui-based company, whose name translates to "Gate of the Era," is one of the largest sellers of B200s, according to documents seen by the FT. It was founded in February, as speculation mounted that Trump would stop H20 chip sales to China. The company is fully owned by a group with the same name based in Shanghai, registered on the same day, according to company filings. The chips were sold in ready-built racks, each containing eight B200s as well as other components and software needed to plug straight into a data centre. Such a rack is about the size of a large suitcase and weighs close to 150 kg including packaging. The current market price ranges between RMB 3 million to RMB 3.5 million ($489,000) per rack, down from more than RMB 4 million in mid-May when they first became available in China in large quantities. The current prices represent about a 50 percent premium from the average selling price of similar products in the US. Since mid-May, Gate of the Era obtained at least two shipments of a few hundred B200 racks each, according to people with knowledge of the deals. They sold them directly -- or indirectly via secondary distributors -- to various data centre suppliers and other companies. Gate of the Era and its affiliates are estimated to have sold close to $400mn of such products. Gate of the Era lists an AI solution provider China Century -- or Huajiyuan in Chinese -- as its largest shareholder, according to company registration files. Also headquartered in Shanghai, China Century states on its website it has a lab in Silicon Valley as well as a supply chain centre in Singapore, with the company saying it uses data tools to build "the new century of a smart China." China Century claims to have more than 100 business partners and highlights AliCloud, ByteDance's Huoshan Cloud, as well as Baidu Cloud as "trusted partners" on its website. AliCloud and Baidu did not respond to requests for comment. Huoshan Cloud's name was taken off China Century's website after the FT approached them for comment. Huoshan Cloud said: "It is standard practice for any company to manage the unauthorized use of its logo. "We have not procured Nvidia's chips. We do not have any related [Nvidia chip] business," said China Century, adding that it did "smart city work," The FT visited the registered headquarters of Gate of the Era at an office in a government-run industrial park dedicated to cryptography companies. No representative was available. The company had not yet moved into the office since changing its registration to the address in June. The FT also visited its previous registered address, which was occupied by a real estate investment group that had been there for more than two years and claimed no connection. When reached on the phone, Gate of the Era declined to comment. According to industry insiders, product specifications and pictures of packaging seen by the FT, many of the B200 racks sold by Gate of the Era, as well as other Chinese distributors, over the past months were originally from Supermicro, a US-based assembler that provides chip solutions to data centers. There is no suggestion that Supermicro is involved in or has knowledge of its products being smuggled into China. Supermicro said it "complies with all US export control requirements on the sale and export of GPU systems." "Export controls will not prevent the most advanced Nvidia products from entering China," said one Chinese data centre operator. "What it creates is just inefficiency and huge profits for the risk-taking middlemen." "It's like a seafood market" Some Chinese distributors openly market products such as Supermicro's B200 racks on social media that show photos of packages with the company's logo -- although it has not been verified if the sales have been completed. To showcase the "plug-and-use" nature of such racks, some vendors provide testing for buyers, according to those with knowledge of the practice and clips posted online. Transactions tend to happen on the spot, with buyers picking up the products after checking their legitimacy. On social media, groups are created to match supply and demand from hundreds of traders and data centre suppliers. Apart from B200, various other restricted Nvidia chips such as H200, H100, and 5090 are being advertised openly on Chinese social media platforms such as Douyin and Xiaohongshu. Packaging and installation pictures and videos seen by the FT show product logos of companies such as Supermicro, Dell, and Asus -- infrastructure providers that assemble Nvidia's chips into servers. There is no suggestion that these companies are aware of the social media advertising or their products being sold in China. Like Supermicro, Dell, and Asus said they maintained rigorous and strict compliance to all laws and regulations, including US export controls, and took action against partners who failed to comply. "It's like a seafood market," said one distributor, "There's no shortage." Racks for sale -- with more smuggled stock to come The B200 is in high demand given its performance, value, and relatively easy maintenance compared with the more complex Grace Blackwell series, according to industry insiders. The GB200 AI rack, containing Nvidia's most high-end products, also appear to be available in China despite US export controls. One distributor claimed it had sold 10 racks of GB200 at close to RMB 40 million ($5.6 million) each. The FT could not independently verify this claim, while marketing information about GB200 from various distributors' accounts on social media shows consistent pricing and stock status as "available for pick up onshore." Some Chinese distributors have even started advertising for their future stock of B300s, Nvidia's upgrade from the B200 expected to enter mass production in the fourth quarter of this year. US export controls have had some effect on the black market. Given the nature of such products, leading Chinese AI players with global operations are not able to order them in a legally compliant way, install them in their own data centers, or receive Nvidia's customer support. This has led to third-party data centre operators becoming key buyers who then provide computing services. Other clients include smaller companies in tech, finance, and health care that do not have strong compliance requirements, as well as Chinese companies on the so-called US entity list that are not allowed to buy any Nvidia chips legally. However, the scale of these projects is much smaller compared with mega clusters of data centers being built by tech giants around the world. With H20 export controls having been lifted, many Chinese tech companies are expected to resume purchasing the compliant chips in large sums even though its performance is generations behind the still restricted products such as B200, according to people familiar with their plans. Black market sales for B200s and other restricted Nvidia chips dropped noticeably after the relaxation of the H20 ban, according to multiple distributors. "People are weighing their options now H20 is available again," said one distributor. "But there will always be demand for the most cutting-edge stuff." The Southeast Asia stop off Industry experts said that Southeast Asian countries have become markets where Chinese groups obtained restricted chips. The US Department of Commerce is discussing adding more export controls on advanced AI products to countries such as Thailand as soon as September, according to two people familiar with the matter. This rule is mainly targeting Chinese intermediaries used to obtain advanced AI chips via these countries. The US commerce department declined to comment. The Thai government did not respond to a request for comment. Earlier this month, Malaysia introduced stricter export controls targeting advanced AI chip shipments from the country to other destinations, especially China. The potential tightening of export controls on Southeast Asian countries has also contributed to buyers rushing to place orders before such rules take effect, according to people with knowledge of the matter. Even if these avenues to obtain AI chips are closed, Chinese industry insiders said new shipping routes would be established. Supplies have already started arriving via European countries not on the restricted list. "History has proven many times before that given the huge profit, arbitrators will always find a way," said one Chinese distributor. Additional reporting by Michael Acton, Demetri Sevastopulo, and Anantha Lakshmi.
[3]
China to Nvidia: Do Your AI Chips Contain a Backdoor?
Democratic lawmakers aren't the only ones worried about Nvidia selling cutting-edge AI chips to China. Ironically, the Chinese government is concerned, too. On Thursday, the Cyberspace Administration of China flagged Nvidia's H20 AI GPU as a potential spying risk, after Nvidia secured White House approval to sell the product in China. It summoned Nvidia to discuss its concerns about the H20 containing "backdoors." In a statement, the agency noted that US lawmakers have floated a proposed bill to require Nvidia to install location-tracking technology on high-end GPUs. The bill's sponsor, Sen. Tom Cotton (R-Ark.), says doing so will help prevent the technology from falling into the hands of "adversaries like Communist China." Without elaborating, China's cybersecurity agency also cited unnamed "US AI experts" who claim Nvidia chips contain mature tracking and remote shutdown capabilities. The agency has asked Nvidia to submit documentation that proves the H20 doesn't pose a spying risk. In response, Nvidia tells PCMag: "Cybersecurity is critically important to us. Nvidia does not have 'backdoors' in our chips that would give anyone a remote way to access or control them." According to Reuters, Nvidia has ordered Taiwan's TSMC to build 300,000 H20 units to meet the demand in China, an indicator that the GPU will become widely used in Chinese data centers. Although the H20 was downgraded to comply with US export controls, Democratic lawmakers fear the AI chip will still prove powerful enough to help the country develop cutting-edge AI technologies for a wide variety of applications, including for the military, putting US national security at risk. However, Nvidia CEO Jensen Huang has defended the advanced chip sales to China, arguing the country is bound to develop cutting-edge AI, with or without US tech. "The question is not whether China will have AI. It already does. The question is whether one of the world's largest AI markets will run on American platforms," he said in May. Meanwhile, the US Commerce Department notes that H20 shipments to China still require an export license. "The Trump Administration will consider any H20 license applications carefully, accounting for both the benefits and the costs of potential exports from America, and considering the views of experts across the US Government," the department tells PCMag.
[4]
Underground China repair shops thrive servicing illicit Nvidia GPUs banned by export restrictions -- companies resurrecting banned AI accelerators at a rate of up to '500 per month'
Despite the best efforts of American politicians, there are plenty of restricted Nvidia data center GPUs in China, but because the parts are smuggled in relatively limited quantities, their owners are inclined to repair failed A100 or H100 processors, as they are obviously not covered by any warranties. As such, Reuters reports that there is a booming underground industry focused on servicing high-end Nvidia AI GPUs that are officially restricted from export to the country. Around a dozen small firms in Shenzhen now reportedly provide repair services for advanced Nvidia GPUs. Two companies confirmed that they primarily handle A100 and H100 units, which can be used to build powerful supercomputers both for AI and HPC, and are restricted from being shipped to Chinese entities. One of them began offering these services in late 2024 and now handles up to 500 GPU repairs per month. These businesses have even set up facilities with server rooms to simulate real-world data center conditions for testing. Apparently, the profitability of this gray-market repair work has prompted businesses to form dedicated offshoots for handling just AI GPUs. AI accelerators -- both add-in cards and SXM modules -- are complex devices that can experience several types of breakdowns due to extreme thermal, electrical, and mechanical stresses they endure in data center environments. Continuous heavy workloads can cause wear-related failures like dry thermal paste, fan issues (in case of some cards), component fatigue on the PCB, and damaged or oxidized connector pins in the SXM interface. More complex problems probably include failure of the power delivery subsystem, solder joint cracks under the massive GPU or HBM packages, or even degradation of the HBM memory. Fatal failures like die cracking (when using liquid cooling) or interposer delamination are relatively rare and unrepairable, but many of the aforementioned issues can be fixed. Reuters reports that repair workshops in Shenzhen usually replace fans (which suggests that they service A100 and H100 cards) and can diagnose memory or PCB failures (which applies to both cards and SXM modules). They can probably also replace passive components like capacitors, inductors, resistors, or MOSFETs, fix damaged pins, and resolder GPU packages. One firm charges between $1,400 and $2,800 per GPU, depending on the repair complexity. Another service provider, which previously focused on GPU rentals, now repairs about 200 Nvidia products monthly, pricing work at approximately 10% of their retail value. The U.S. barred sales of supercomputer-grade A100 and H100 to China in 2022, prompting Nvidia to build its slightly cut-down versions A800 and H800 to comply with the latest U.S. export rules. In 2023, the U.S. banned sales of these processors too, which required Nvidia to introduce a massively cut-down H20 HGX GPU for the Chinese market in 2023. This is perhaps when various entities and individuals began to smuggle high-performance Nvidia GPUs to China, so there are plenty of A100 and H100 processors in the People's Republic. Most of these AI GPUs have been working under high loads 24/7 for a couple of years now, so their failure rate is rising, making their repair a profitable business. Despite restrictions, possession and repair of Nvidia GPUs are not illegal under Chinese law. Still, companies offering these services remain cautious and avoid attracting attention from either Chinese or American authorities, as they also have perfectly legal businesses that may provide services to products officially shipped the country, such as Nvidia GeForce graphics cards, or gaming laptops. To that end, these repair shops would rather not get into conflicts with Nvidia.
[5]
Nvidia seeks extra 300,000 H20 GPUs to meet China's surging AI demand -- places order with TSMC to meet unexpectedly strong interest
Nvidia's China strategy is shifting once again. According to Reuters, the company has placed a fresh order for 300,000 H20 AI GPUs with TSMC, spurred by unexpectedly strong demand from Chinese tech giants. This move comes just weeks after the Trump administration reversed an April ban on the H20, a China-specific chip designed to comply with U.S. export controls but still powerful enough to dominate AI inference workloads. The decision marks a reversal of Nvidia's earlier stance. CEO Jensen Huang, during a recent visit to Beijing, had hinted that H20 production would remain paused unless customer demand justified a restart -- something that would take nine months to spin up. But with existing stockpiles of 600,000-700,000 H20 units quickly dwindling, and reports of smuggling and a booming repair market for banned GPUs, Nvidia is clearly seeing enough momentum to justify new orders. For context, the H20 is not a regular flagship GPU. While it lacks the raw power of Nvidia's actual flagship H100 or the newer Blackwell series, industry insiders say it's finely tuned for AI inference tasks, with some experts noting that it can even outperform the H100 in certain workloads. Chinese tech heavyweights like Tencent, ByteDance, and Alibaba had already stockpiled these chips ahead of the April ban, often pairing them with DeepSeek's cost-optimized AI models. Yet the U.S. government has not fully cleared the path. Nvidia still requires export licenses for these shipments, and sources told Reuters that the Commerce Department has yet to approve them. In the meantime, Nvidia is asking Chinese customers to submit detailed order forecasts and documentation, signaling a more tightly controlled distribution pipeline. Financially, the stakes are massive for the Green Team. After the April ban, Nvidia warned of a potential $5.5 billion inventory write-off and an additional $15 billion in lost sales -- a hit that would have dented its lead in the AI hardware race. For context, Nvidia sold roughly 1 million H20 chips in 2024, meaning this latest TSMC order represents nearly a third of last year's total volume. The political backlash, however, is intensifying. Twenty U.S. national security experts, including former officials from the Bush and Trump administrations, have urged the Commerce Department to reinstate the H20 ban, warning that the chip is "a potent accelerator of China's frontier AI capabilities." Their letter argues that the H20's inference performance could bolster China's military AI efforts and weaken U.S. export control policies, something that Jensen Huang has disagreed with before. Despite this pressure, Nvidia is betting that keeping its software ecosystem entrenched in China is critical to maintaining its dominance. If Chinese developers migrate fully to Huawei's competing solutions, the long-term loss could be far greater than any short-term political fallout. The H20 may not be Nvidia's flagship, but in the high-stakes U.S.-China tech rivalry, it's becoming a chip that symbolizes far more than just performance.
[6]
Nvidia: Selling AI GPUs to China Will Help the US Win. Democrats Are Skeptical
After the Trump administration reversed course to allow Nvidia to resume AI chip sales to China, the chipmaker is defending the move as a win for the US. Democrats, however, argue that the move is puzzling and "stands in direct contradiction" to the White House's new AI Action Plan. Nvidia designed its lower-power H20 chip for the Chinese market to comply with US export controls, but in April, the US restricted H20 sales to prevent the Chinese government from obtaining cutting-edge chips to power its AI ambitions. Earlier this month, the White House lifted those restrictions. According to Nvidia, the US government has "assured" the company that licenses will be granted for the H20 sales. The company has even placed orders for 300,000 H20 chipsets with Taiwan's TSMC to fulfill the Chinese demand, per Reuters. "The H20 helps America win the support of developers worldwide, promoting America's economic and national security," Nvidia said in a statement. "It does not enhance anyone's military capabilities, and the US government has full visibility and authority over every H20 transaction." Nvidia issued the statement after a group of Democratic senators -- including Mark Warner, vice chair of the Senate Intelligence Committee -- sent a letter to Commerce Secretary Howard Lutnick, criticizing the White House's decision to lift the chip restrictions, "despite evidence that these chips" will support China's pursuit of the next-generation AI, they wrote. "The PRC's [People's Republic of China's] development of advanced AI capabilities represents a clear risk to the United States national and economic security, and the administration's willingness to trade away that security is extremely troubling," the letter adds. The Democrats are also worried the H20 will prove to be a powerful GPU, on par with Nvidia's other leading-edge chips, despite its lower capabilities. "Indeed, by many measures the H20 performs better than other controlled chips: with the addition of high-bandwidth memory features and improved power-efficiency, many PRC firms reportedly prefer the H20 to other controlled chips," the letter says. The senators argue that allowing sales to China "undermines" Trump's AI Action Plan, "which purports to strengthen export control efforts on AI compute." So far, the Commerce Department hasn't responded to the concerns. But Nvidia CEO Jensen Huang has previously criticized the AI chip ban, which would cost the company billions in lost sales. Huang claims China will develop cutting-edge AI with or without US technology. "Export controls should strengthen US platforms, not drive half of the world's AI talent [China's AI researchers] to rivals," Huang said in May, adding: "The question is not whether China will have AI. It already does. The question is whether one of the world's largest AI markets will run on American platforms." AMD also plans to resume its own AI GPU sales to China. The company didn't immediately respond to a request for comment. Huang and Su were in attendance at last week's AI Summit, where President Trump unveiled the AI Action Plan and gave both CEOs a shoutout. He didn't get into detail about specific chips; Trump said he'd "never heard" of Nvidia before this year. But in prepared remarks, he pledged to "maintain necessary protections for our national security, but we will never forget that the greatest threat of all is to forfeit the race and force our partners into rival technology."
[7]
Beijing asks Nvidia about backdoors in China-bound AI chips
H20 silicon under the microscope after slipping through US export bans China's internet watchdog has hauled Nvidia in for a grilling over alleged backdoors in its H20 chips, the latest twist in the increasingly paranoid semiconductor spat between Washington and Beijing. Nvidia was recently given the thumbs-up to resume sales of its made-for-China H20 AI chips after Washington quietly reversed an earlier export ban on the silicon. The Trump administration originally imposed the ban in April over fears the kit could wind up powering Chinese military systems. However, Nvidia's return to the Chinese market looks set to come with strings attached, as Beijing has once again sharpened its scrutiny of foreign silicon slipping past the firewall. In a statement issued Thursday, the Cyberspace Administration of China (CAC) claimed there were "serious security vulnerabilities" in Nvidia's high-performance computing chips, which are widely used for AI workloads. The warning presumably comes in response to the introduction of the Chip Security Act, which calls for mandatory GPS-style tracking to be embedded in every AI chip exported from the United States. According to the CAC's statement, American AI experts had already revealed that Nvidia's chips contain mature "tracking and positioning" and "remote shutdown" technologies, fueling fears in Beijing that such features could be exploited to monitor or disable Chinese systems. The CAC said it had interviewed Nvidia to discuss suspected backdoor vulnerabilities and demanded that the US chip giant "explain the security risks" and provide "relevant supporting materials." The agency cited provisions in the country's Cybersecurity Law, Data Security Law, and Personal Information Protection Law as the legal basis for the intervention. "In order to maintain the network security and data security of Chinese users, the State Internet Information Office interviewed Nvidia on July 31, 2025, and asked Nvidia to explain the security risks of the backdoor vulnerabilities in the H20 chips sold to China and submit relevant supporting materials," reads a version of the CAC's statement translated by The Register. The H20 chip is part of Nvidia's China-specific product line, cobbled together after Washington tightened the screws on semiconductor exports in 2023 to limit China's access to high-end AI chips that could be used in military or surveillance applications. Nvidia designed the H20 chip to sidestep US trade restrictions by dialing down performance just enough to dodge the Commerce Department's red lines, while still offering enough grunt to keep Chinese firms interested. It's based on Nvidia's Hopper architecture, the same tech underpinning its high-end H100 chips, but with trimmed-down specs to keep Uncle Sam happy. Despite the restrictions, an estimated $1 billion worth of Nvidia AI chips, including banned models like the B200, H10, and H200, wound up in China's black market last week, with vendors hawking ready-to-rack kits straight out of a "fell off a truck" story. A spokesperson ar Nvidia told The Register: "Cybersecurity is critically important to us. Nvidia does not have 'backdoors' in our chips that would give anyone a remote way to access or control them." ®
[8]
$1 billion in Nvidia chips found their way to China: FT
An estimated $1 billion worth of smuggled high-end Nvidia AI processors have reportedly found their way onto the Chinese black market, despite the US government's strict restrictions on exports of the tech. The eyebrow-raising figure, which Nvidia has neither confirmed nor refuted, was revealed by the Financial Times, which claims to have based its reporting on a combination of interviews and analyses of company filings and sales contracts. If accurate, the report sheds light on the limitations of the US trade policy's ability to control the movement of much sought-after AI technology around the world. The specific chips cited are Nvidia's B200 series, part of the Blackwell architecture that debuted last year. According to the FT's report, the units sold through China's black market are distributed as ready-made racks containing multiple processors each, which can be installed into datacenters without significant hardware integration. Software needed to fire up the racks is reportedly included in the bargain. These same chips are used by virtually all US AI powerhouses, including Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and others. However, exports of advanced Nvidia chips to China have been sharply restricted by US trade policy. That doesn't seem to have stopped the chips from making their way into the Middle Kingdom through less scrupulous distributors, often rumored to include those in nearby countries such as Malaysia and Thailand. This sort of semiconductor skullduggery is nothing new for China, where an underground market for Western-designed semiconductors has long thrived. China's capacity for chip fabrication has lagged behind its economic competitors. Foremost among these is Taiwan, China's contentious neighbor and home to fab giant TSMC, which manufactures most of Nvidia's chips. Occasionally, rumors of a new, competitive, Chinese-produced microprocessor emerge, only for the shipping product to be revealed as little more than a bootlegged version of an earlier-generation chip by a Silicon Valley firm such as Intel or AMD. In response, US lawmakers have increasingly tightened trade regulations on semiconductor technology sales to China, particularly where it comes to AI chips. The loudest voices have come from the so-called China hawks in Congress, who view the Asian nation as the US' leading opponent in a trade war in which technology is a key issue. Feeding this hostility are China's claims that it can achieve greater progress in AI research than US firms and with less. The researchers behind DeepSeek, the Chinese large language model (LLM) announced earlier this year, claim it can achieve results equivalent to those of the best models designed by US AI titans, but with far less investment. For a time, the Trump administration's ban on exports of AI chips to China was universal. As of April, Nvidia could not sell AI chips to China. Earlier this month, however, the administration lifted the ban, but only for comparatively underpowered chips such as the H20. Even this backpedal was met with disapproval from some quarters of government. Despite all this back-and-forth over which chips may be sold to China, the availability of processors from Nvidia and other suppliers on the Chinese black market has not abated. According to the FT report, the B200 series were not the only Nvidia AI chips available for sale through illicit means. Other models that seemingly "fell off the truck" include the H200, H100, and 5090. This is not a great look for Nvidia. The Silicon Valley-based chipmaker's big bet on AI processors has paid off handsomely, making it the first company in history to achieve a $4 trillion valuation. But accurate? The circulation of restricted Nvidia chips in China, even without the company's involvement, could still draw scrutiny from US lawmakers. For its part, Nvidia stopped short of outright denying the claims of black market sales of its chip. However, in a statement to the FT, it dismissed the idea of what it described as "cobbled together" datacenters made from "smuggled products." "Datacenters require service and support, which we provide only to authorized Nvidia products," a company spokesperson said. The Chinese distributors selling the illicit merchandise, on the other hand, claim the prebuilt rack-mount processor units are virtually plug-and-play. The products are typically advertised on social media sites, and some vendors even advertise testing to ensure their customers are getting what they pay for. That's only fair, because they pay a pretty penny. Chinese buyers of the illicit merchandise typically pay a 50 percent surcharge over what a legitimate customer in another region might spend. Meanwhile, Jensen Huang, Taiwan-born co-founder and CEO of Nvidia, sees China as a significant opportunity for the company, both in terms of market and as a substantial source of talent. His negotiations with President Trump are thought to be a significant factor in the administration's choice to lift the blanket ban on Nvidia chip exports. Other US companies are less bullish on Chinese partnerships. AWS recently closed its AI lab in China, citing staff reduction and other "business decisions." It's unclear whether the Trump administration's continued escalation of its trade war with China played into this move, but there's little doubt that the chilly relations between the two global powers are unlikely to warm up soon. ®
[9]
Nvidia AI chips worth $1 billion entered China despite US curbs, FT reports
July 24 (Reuters) - Nvidia's (NVDA.O), opens new tab advanced artificial intelligence chips worth at least $1 billion were smuggled to China in the three months after Washington tightened chip export controls, the Financial Times reported on Thursday. The AI chip designer's high-end B200 processors, banned for sale in China, is widely available on a thriving Chinese black market for U.S. chips, the report said, citing sales contracts, company filings and multiple people with direct knowledge of the deals. Nvidia told Reuters that building data centers with smuggled products is inefficient both technically and financially, as the company only offers service and support for authorized products. The U.S. Department of Commerce, White House and Thai government did not immediately respond to requests for comment. Reuters could not independently verify the FT report. In May, multiple Chinese distributors started selling B200s to suppliers of data centers that serve Chinese AI groups, according to the report. The U.S. and China are battling for global dominance in AI and other cutting-edge technologies, triggering a tightrope walk for companies such as Nvidia between the world's two largest economies. Nvidia last week said it would be allowed to resume sales to China after the Trump administration reversed an export restriction on the sales of chips such as H20. The curbs were imposed in April. In the three months before that, Chinese distributors from Guangdong, Zhejiang and Anhui provinces sold Nvidia's B200s, as well as other restricted processors such as the H100 and H200, according to the report. Southeast Asian countries have become markets where Chinese groups obtained restricted chips, the report said, citing industry experts. The U.S. Commerce Department is discussing adding more export controls on advanced AI products to countries such as Thailand as soon as September, the report said. Reporting by Jaspreet Singh in Bengaluru; Editing by Arun Koyyur Our Standards: The Thomson Reuters Trust Principles., opens new tab
[10]
Nvidia says its chips have no 'backdoors' after China flags H20 security concerns
BEIJING/SAN FRANCISCO, July 31 (Reuters) - Nvidia (NVDA.O), opens new tab said on Thursday its products have no "backdoors" that would allow remote access or control after China raised concerns over potential security risks in the firm's H20 artificial intelligence chip. The Cyberspace Administration of China, the country's internet regulator, said it was concerned by a U.S. proposal for advanced chips sold abroad to be equipped with tracking and positioning functions. The CAC's move cast uncertainty over the U.S. company's sales prospects in China weeks after a U.S. export ban was reversed. The regulator said it had summoned Nvidia to a meeting on Thursday to explain whether its H20 AI chip had any backdoor security risks, as it was worried that Chinese user data and privacy rights could be affected. A backdoor risk refers to a hidden method of bypassing normal authentication or security controls. In a statement, an Nvidia spokesperson said, "Cybersecurity is critically important to us. Nvidia does not have 'backdoors' in our chips that would give anyone a remote way to access or control them." The White House and both houses of U.S. Congress have proposed the idea of requiring U.S. chip firms to include location verification technology with their chips to prevent them from being diverted to countries where U.S. export laws ban sales. The separate bills and White House recommendation have not become a formal rule, and no technical requirements have been established. Nvidia has been a focus of U.S.-China relations, and China's move comes shortly after the U.S. this month reversed an April ban on Nvidia selling the H20 chip to China. The company developed the H20 chip for the Chinese market after the U.S. imposed export restrictions on advanced AI chips in late 2023. "Nvidia chips are now dispensable for China. They can be easily put on the negotiating table," said Tilly Zhang, an analyst with Gavekal Dragonomics. "China obviously has more courage and domestic substitution capabilities compared to previous years to not rely on overseas technology." This month, Nvidia CEO Jensen Huang embarked on a public and effusive visit to China, where he sought to demonstrate his commitment to the Chinese market, met with government officials, and praised the country's AI advances. The CAC statement did not elaborate on what backdoor security risks there could be or say what the Chinese government was considering doing as a result. STRONG DEMAND Charlie Chai, an analyst with tech- and consumer-focused 86Research, said Beijing's warning was likely a symbolic stance against similar objections made by U.S. authorities. "However, we do not believe Beijing will make excessively harsh demands or introduce regulatory hurdles that will effectively drive Nvidia out of China, for the lack of alternatives. China still needs Nvidia chips for domestic research and applications," Chai said. Nvidia's products are highly sought after not just by Chinese tech companies but also by Chinese military bodies, state-run AI research institutes, and universities. The company last week placed an order with contract manufacturer TSMC for 300,000 H20 chipsets due to strong demand, Reuters reported. Chinese authorities and industry associations have in the past accused U.S. tech companies of posing security risks, with varying consequences. In early 2023, China barred key operators of the country's infrastructure from purchasing from Micron (MU.O), opens new tab, saying that a review it conducted had found the U.S. memory chipmaker's products posed serious security risks. Last year, the Cybersecurity Association of China, an industry group, called for Intel (INTC.O), opens new tab products sold in China to be subject to a security review, but Chinese regulators have not publicly responded. Nvidia is also facing an antitrust investigation in China. The State Administration for Market Regulation announced late last year it was investigating the chipmaker over suspected violations of the country's anti-monopoly law. The regulator said Nvidia was also suspected of violating commitments it made during its acquisition of Israeli chip designer Mellanox Technologies, under terms outlined in the regulator's 2020 conditional approval of that deal. Reporting by Beijing Newsroom; Editing by Jacqueline Wong, Sam Holmes, Rod Nickel Our Standards: The Thomson Reuters Trust Principles., opens new tab
[11]
Nvidia AI chips: repair demand booms in China for banned products
BEIJING/SHANGHAI, July 25 (Reuters) - Demand in China has begun surging for a business that, in theory, shouldn't exist: the repair of advanced Nvidia (NVDA.O), opens new tab artificial intelligence chipsets that the U.S. has banned the export of to its trade and tech rival. Around a dozen boutique companies now offer repair services, according to two such firms in the tech hub of Shenzhen which say they predominantly fix Nvidia's H100 graphics processing units (GPUs) that have somehow made their way to the country, as well as A100 GPUs and a range of other chips. Even before it was launched, the H100 was banned from sale in China in September 2022 by U.S. authorities keen to rein in Chinese technological development, particularly advances that its military could use. Its predecessor, the A100, was also banned at the same time after being on the market for over two years. "There is really significant repair demand," said a co-owner of a firm that has been fixing Nvidia's gaming GPUs for 15 years and began working on AI chips in late 2024. Business has been so good that the owners created a new company to handle those orders, which now repairs up to 500 Nvidia AI chips per month. Its facilities, as shown in social media advertising, include a room which can accommodate 256 servers, simulating customers' data centre environments to conduct testing and validate repairs. The rapid growth of the repair industry from late last year supports the view that there has been a significant amount of smuggling of Nvidia chipsets into China. Tenders have shown that the government and the military have made purchases of the U.S. firm's banned AI chips. Concern about large-scale smuggling of high-end Nvidia products into China has prompted both Republican and Democratic lawmakers to introduce bills that would require the tracking of chipsets so that their location can be verified after they are sold. U.S. President Donald Trump's administration also backed the idea this week. The thriving repair industry also highlights how Nvidia's advanced GPUs remain in high demand despite new, albeit less powerful, products from Chinese tech giant Huawei (HWT.UL). Though the buying, selling and repair of Nvidia GPUs is not illegal in China, sources for this article were reluctant to draw scrutiny from U.S. or Chinese authorities and declined to be identified. Nvidia cannot legally provide repair or replacement items for restricted products in China. In contrast, sources said if an Nvidia GPU in another nation has a defect and is under warranty, which is normally three years, the company usually replaces it. An Nvidia spokesperson said only the company and authorised partners "are able to provide the service and support that customers need. Using restricted products without approved hardware, software, and technical support is a nonstarter, both technically and economically." REPAIR DEMAND MAY NOT FADE Nvidia has only just been allowed to recommence sales of its H20 AI chipset, which has been specifically developed for China to comply with U.S. restrictions. Switching over to H20 chipsets is, however, not necessarily a simple or good option for Chinese entities. Price is an issue as one H20 server with eight GPUs inside will likely cost more than 1 million yuan ($139,400), industry sources say. H20 chipsets, which have increased memory bandwidth, have been specifically designed for AI inference work, but firms involved in the training of large language models would likely prefer H100 chipsets which are better suited to that task. Industry sources said some of the H100 and A100 GPUs in China have been crunching data around the clock for years now, leading to an increase in failure rates. Depending on how frequently a GPU is used and how often it is maintained, an Nvidia GPU generally lasts two to five years before needing to be repaired, they said. According to the first source, his company charges between 10,000 yuan and 20,000 yuan ($1,400 to $2,800) to fix a GPU depending on the complexity of the problem. The second Shenzhen-based repair service provider - which shifted from GPU rentals to repairs this year - says it can repair up to 200 Nvidia AI chips each month, charging about 10% of the GPUs' original selling price per repair. Services generally include software testing, fan repair, printed circuit board and GPU memory fault diagnostics and repair, as well as the replacement of broken parts. In the meantime, smuggling of high-end Nvidia chips continues. Traders of chips in China say customer demand is pivoting to top-of-the-line B200 chips which Nvidia began shipping to other countries in larger quantities this year. A server with eight B200 GPUs costs more than 3 million yuan in China, they said. ($1 = 7.1724 Chinese yuan) Reporting by Che Pan in Beijing and Casey Hall in Shanghai; Additional reporting by Stephen Nellis in San Francisco; Editing by Anne Marie Roantree and Edwina Gibbs Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * China Casey Hall Thomson Reuters Casey has reported on China's consumer culture from her base in Shanghai for more than a decade, covering what Chinese consumers are buying, and the broader social and economic trends driving those consumption trends. The Australian-born journalist has lived in China since 2007.
[12]
Exclusive: Nvidia orders 300,000 H20 chips from TSMC due to robust China demand, sources say
BEIJING/SHANGHAI/NEW YORK, July 29 (Reuters) - Nvidia (NVDA.O), opens new tab placed orders for 300,000 H20 chipsets with contract manufacturer TSMC (2330.TW), opens new tab last week, two sources said, with one of them adding that strong Chinese demand had led the U.S. firm to change its mind about just relying on its existing stockpile. The Trump administration this month allowed Nvidia to resume sales of H20 graphics processing units (GPUs) to China, reversing an effective ban imposed in April designed to keep advanced AI chips out of Chinese hands due to national security concerns. Nvidia developed the H20 specifically for the Chinese market after U.S. export restrictions on its other AI chipsets were imposed in late 2023. The H20 does not have as much computing power as Nvidia's H100 or its new Blackwell series sold in markets outside China. The new orders with Taiwan's TMSC would add to existing inventory of 600,000 to 700,000 H20 chips, according to the sources who were not authorised to speak to media and declined to be identified. For comparison purposes, Nvidia sold around 1 million H20 chips in 2024, according to U.S. research firm SemiAnalysis. Nvidia CEO Jensen Huang said during a trip to Beijing this month that the level of H20 orders it received would determine whether production would begin again, adding that any restart to the supply chain would take nine months. The Information reported after Huang's trip that Nvidia had told customers it had limited H20 stocks available and it had no immediate plans to restart wafer production for the GPU. Nvidia needs to obtain export licenses from the U.S. government to ship the H20 chips. It said in mid-July it had been assured by authorities that it would get them soon. The U.S. Department of Commerce has yet to approve those licenses, one of the sources and a third source said. Nvidia on Monday declined to comment on the new orders or the status of its license applications. TSMC declined to comment. The U.S. Commerce Department did not immediately respond to a request for comment. Nvidia has asked Chinese companies interested in purchasing Nvidia H20 chips to submit new documentation including order volume forecasts from clients, said one of the sources and a fourth source. KEY PRODUCT IN US-SINO TRADE WAR The Trump administration said the resumption of H20 sales was part of negotiations with China over rare earth magnets - elements essential for many industries and which Beijing had limited exports of as trade war tensions escalated. The decision drew bipartisan condemnation from U.S. legislators who are worried that giving China access to the H20 will impede U.S. efforts to maintain its lead in AI technology. But Nvidia and others argue that it is important to retain Chinese interest in its chips - which work with Nvidia's software tools - so that developers do not completely switch over to offerings from rivals like Huawei. Before the April ban, Chinese technology giants including Tencent (0700.HK), opens new tab, ByteDance and Alibaba (9988.HK), opens new tab substantially increased H20 orders as they deployed DeepSeek's cost-effective AI models as well as their own models. The popularity of Nvidia products in China, despite the advent of rival, albeit less powerful, offerings from Huawei, has been underscored by a boom in repair demand for its other banned GPUS - many of which have been smuggled into the country. After the April ban on H20 sales, Nvidia warned that it would have to write off $5.5 billion in inventories, while Huang told the Stratechery podcast that the company also had to forgo $15 billion in potential sales. Reporting by Liam Mo in Beijing, Brenda Goh in Shanghai and Karen Freifeld in New York; Additional reporting by Che Pan in Beijing and Wen-Yee Lee in Taipei; Editing by Edwina Gibbs Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * China Brenda Goh Thomson Reuters Brenda Goh is Reuters' Shanghai bureau chief and oversees coverage of corporates in China. Brenda joined Reuters as a trainee in London in 2010 and has reported stories from over a dozen countries.
[13]
China's cyberspace regulator questions Nvidia over AI chip privacy risks
BEIJING, July 31 (Reuters) - China's cyberspace regulator said it has asked U.S. semiconductor maker Nvidia (NVDA.O), opens new tab to explain whether its H20 artificial intelligence chips have any backdoor security risks. The Cyberspace Administration of China said it met with Nvidia on Thursday after U.S. lawmakers called for advanced chips sold abroad to be equipped with tracking and positioning functions. The regulator said the matter raised concerns over the potential impact on Chinese user data and privacy rights. Nvidia did not immediately respond to a Reuters' request for comment. In May, U.S. senator Tom Cotton introduced a bill that would direct the Commerce Department to require location verification mechanisms for AI chips subject to export restrictions, to curb Chinese access to advanced U.S. semiconductor technology. Nvidia developed the H20 chip for the Chinese market after the U.S. imposed export restrictions on advanced AI chips in late 2023. The chip has had a turbulent path to market amid shifting regulatory policies. The U.S. this month reversed an April ban on Nvidia selling the H20 to China. Reuters reported this week that Nvidia had placed orders for 300,000 H20 chipsets with contract manufacturer Taiwan Semiconductor Manufacturing Co (2330.TW), opens new tab, with one source saying strong Chinese demand had prompted the U.S. company to abandon plans to rely solely on existing inventory. Nvidia is also facing an antitrust investigation in China. The State Administration for Market Regulation announced late last year it was probing the chipmaker over suspected violations of the country's anti-monopoly law. The regulator said Nvidia was also suspected of violating commitments it made during its acquisition of Israeli chip designer Mellanox Technologies, under terms outlined in the regulator's 2020 conditional approval of that deal. Reporting by Beijing Newsroom; Editing by Jacqueline Wong and Christopher Cushing Our Standards: The Thomson Reuters Trust Principles., opens new tab
[14]
China's cyberspace regulator summons Nvidia over H20 chip security risks concerns
BEIJING, July 31 (Reuters) - China's cyberspace regulator said it has asked U.S. semiconductor maker Nvidia (NVDA.O), opens new tab to explain whether its H20 artificial intelligence chips have any backdoor security risks. The Cyberspace Administration of China said it met with Nvidia on Thursday after U.S. lawmakers called for advanced chips sold abroad to be equipped with tracking and positioning functions. The regulator said the matter raised concerns over the potential impact on Chinese user data and privacy rights. Nvidia did not immediately respond to a Reuters' request for comment. In May, U.S. senator Tom Cotton introduced a bill that would direct the Commerce Department to require location verification mechanisms for AI chips subject to export restrictions, to curb Chinese access to advanced U.S. semiconductor technology. The U.S. this month reversed an April ban on Nvidia selling the H20 to China. Nvidia developed the H20 chip for the Chinese market after the U.S. imposed export restrictions on advanced AI chips in late 2023. The chip has had a turbulent path to market amid shifting regulatory policies. Reporting by Beijing Newsroom; Editing by Jacqueline Wong and Christopher Cushing Our Standards: The Thomson Reuters Trust Principles., opens new tab
[15]
China flags concerns over potential security risks in Nvidia's H20 chips
BEIJING, July 31 (Reuters) - China raised concerns over potential security risks in Nvidia's (NVDA.O), opens new tab H20 artificial intelligence chip, casting uncertainty over the U.S. company's sales prospects in China weeks after a U.S. export ban was reversed. The Cyberspace Administration of China, the country's internet regulator, said it was concerned by a U.S. proposal for advanced chips sold abroad to be equipped with tracking and positioning functions. It said it had summoned Nvidia to a meeting on Thursday to explain whether its H20 AI chip had any backdoor security risks, as it was worried that Chinese user data and privacy rights could be affected. Nvidia did not immediately respond to a Reuters' request for comment. In May, U.S. senator Tom Cotton introduced a bill that would direct the Commerce Department to require location verification mechanisms for AI chips subject to export restrictions, to curb Chinese access to advanced U.S. semiconductor technology. Nvidia has been in the crosshairs of U.S.-China relations and China's move comes shortly after the U.S. this month reversed an April ban on Nvidia selling the H20 chip to China. The company developed the H20 chip for the Chinese market after the U.S. imposed export restrictions on advanced AI chips in late 2023. Last month, Nvidia CEO Jensen Huang embarked on a very public and effusive visit to China where he sought to demonstrate his commitment to the Chinese market, met with government officials and praised the country's AI advances. The CAC statement did not elaborate on what backdoor security risks there could be or say what the Chinese government was considering to do as a result. Nvidia's products are highly sought after not just by Chinese tech companies but also by Chinese military bodies, state-run AI research institutes and universities. The company placed an order for 300,000 H20 chipsets last week due to strong demand, Reuters reported. Chinese authorities and industry associations have in the past accused U.S. tech companies of posing security risks, with varying consequences. In early 2023, China barred key operators of the country's infrastructure from purchasing from Micron (MU.O), opens new tab, saying that a review it conducted had found that the U.S. memory chip maker's products posed serious security risks. Last year, an industry group, the Cybersecurity Association of China, called for Intel (INTC.O), opens new tab products sold in China to be subject to a security review, but Chinese regulators have not publicly responded. Nvidia is also facing an antitrust investigation in China. The State Administration for Market Regulation announced late last year it was investigating the chipmaker over suspected violations of the country's anti-monopoly law. The regulator said Nvidia was also suspected of violating commitments it made during its acquisition of Israeli chip designer Mellanox Technologies, under terms outlined in the regulator's 2020 conditional approval of that deal. Reporting by Beijing Newsroom; Editing by Christopher Cushing and Jacqueline Wong Our Standards: The Thomson Reuters Trust Principles., opens new tab
[16]
Nvidia addresses AI chip smuggling, says bootleg datacenters are a 'losing proposition'
The statement came in response to a Financial Times report that at least $1 billion worth of its artificial intelligence chips illegally entered China. "Trying to cobble together datacenters from smuggled products is a losing proposition, both technically and economically," a spokesperson said in a statement to CNBC. "Datacenters require service and support, which we provide only to authorized NVIDIA products." According to the FT report, at least $1 billion worth of the company's chips entered China as President Donald Trump rolled out restrictions on shipments of the company's H20 chips to the world's second-largest economy. Nvidia's B200 chips, which are prohibited from being sold to China, have become popular on the black market despite restrictions, the Financial Times reported, citing sales contracts, company filings and people familiar with the deals.
[17]
China summons Nvidia over 'backdoor safety risks' in H20 chips
WASHINGTON (AP) -- China's cyberspace regulators on Thursday summoned Nvidia over security concerns that its H20 chips can be tracked and turned off remotely, the Cyberspace Administration of China said on its website. In the meeting, Chinese regulators demanded that the U.S. chip company provide explanations on "backdoor safety risks" of its H20 chips to be sold in China and submit relevant materials, the office said. "Cybersecurity is critically important to us. NVIDIA does not have 'backdoors' in our chips that would give anyone a remote way to access or control them," an Nvidia spokesperson said in a statement to AP. It came just about two weeks after the Trump administration lifted the block on the computing chips and allowed Nvidia to resume sales of H20 chips to the Chinese market. Jensen Huang, chief executive of Nvidia, made the announcement with fanfare when he was in Beijing earlier this month. The latest episode appears to be another turbulence in the tech rivalry between the United States and China, which have left businesses in both countries tussling with governments over market access and national security concerns. Any safety concern by Beijing could jeopardize the sale of H20 chips in China. Citing unnamed U.S. AI experts, the Chinese regulators said Nvidia has developed mature technology to track, locate and remotely disable its computing chips. The regulators summoned Nvidia to "safeguard the cybersecurity and data security of Chinese users," in accordance with Chinese laws, the statement said. The statement also referred to a call by U.S. lawmakers to require tracking and locating capabilities on U.S. advanced chips sold overseas. In May, Rep. Bill Huizenga, R.-Michigan, and Rep. Bill Foster, D.-Illinois, introduced the Chip Security Act that would require high-end chips to be equipped with "security mechanisms" to detect "smuggling or exploitation." The bill has not moved through Congress since its introduction. Foster, a trained physicist, then said, "I know that we have the technical tools to prevent powerful AI technology from getting into the wrong hands." The U.S. still bans the sale to China of the most advanced chips, which are necessary for developing artificial intelligence. Both countries aim to lead in the artificial intelligence race. The Trump administration in April blocked the sales of H20 chips, which Nvidia developed to specifically comply with U.S. restrictions for exports of AI chips to China. After the ban was lifted, Nvidia expected to sell hundreds of thousands more H20 chips in the Chinese market. But the easing of the ban has raised eyebrows on Capitol Hill. On Monday, a group of top Democratic senators, including Minority Leader Sen. Chuck Schumer, wrote to Commerce Secretary Howard Lutnick to express their "grave concerns". While chips like the H20 have differing capabilities than the most advanced chips such as Nvidia's H100, "they give (China) capabilities that its domestically-developed chipsets cannot," the senators wrote. Shortly after the ban was lifted, Rep. John Moolenaar, R.-Michigan, who chairs the House Select Committee on China, objected. "The Commerce Department made the right call in banning the H20. Now it must hold the line," Moolenaar wrote in a letter to Lutnick. "We can't let the CCP use American chips to train AI models that will power its military, censor its people, and undercut American innovation," Moolenaar wrote, referring to the Chinese Communist Party by its acronym.
[18]
$1 billion of NVIDIA AI chips were reportedly sold in China despite US bans
Financial Times details a thriving black market amid tight export controls. that $1 billion worth of NVIDIA AI chips were smuggled into China in the three months after the Trump administration . Citing sales contracts, company documents and people with direct knowledge, the publication says that a thriving black market arose for American semiconductors. Products sold included NVIDIA's top‑tier B200 chips, which have become the for American big tech when training AI models. Sale of these chips to China is banned by the United States. With journalists on the ground in China, Financial Times reports on a veritable web of third‑party data center operators, middlemen and purportedly smuggled ready‑built racks that have all materialized to meet the demand for NVIDIA's most powerful chips. Along with the B200, the H100 and H200 are also restricted yet highly sought after. All of these are far more capable than the weaker H20 chip, which was with export restrictions for sale to China, though even that model has faced and export bans. NVIDIA, for its part, told Financial Times it has "no evidence of any AI chip diversion" and that "trying to cobble together data centers from smuggled products is a losing proposition, both technically and economically." NVIDIA explained, "Data centers require service and support, which we provide only to authorized NVIDIA products." Images produced by Financial Times show boxes of server racks emblazoned with company logos such as Supermicro and ASUS being advertised on social media in China. Those companies deny any knowledge of how their products ended up on the Chinese black market, and Financial Times is not alleging any such involvement. Reporting suggests that some Southeast Asian countries have become hubs for Chinese groups to obtain restricted chips. Having these server racks shipped to Thailand or Malaysia may circumvent US export controls. The US Department of Commerce is increasing export controls on advanced AI chips to these countries. The demand for these products is without question, and as one Chinese distributor told Financial Times, "History has proven many times before that given the huge profit, arbitrators will always find a way."
[19]
Nvidia orders 300,000 H20 chips from TSMC due to robust China demand, Reuters reports
Nvidia placed orders for 300,000 H20 chipsets with contract manufacturer TSMC last week. Nvidia placed orders for 300,000 H20 chipsets with contract manufacturer TSMC last week, two sources said, with one of them adding that strong Chinese demand had led the U.S. firm to change its mind about just relying on its existing stockpile. The Trump administration this month allowed Nvidia to resume sales of H20 graphics processing units (GPUs) to China, reversing an effective ban imposed in April designed to keep advanced AI chips out of Chinese hands due to national security concerns. Nvidia developed the H20 specifically for the Chinese market after U.S. export restrictions on its other AI chipsets were imposed in late 2023. The H20 does not have as much computing power as Nvidia's H100 or its new Blackwell series sold in markets outside China. The new orders with Taiwan's TMSC would add to existing inventory of 600,000 to 700,000 H20 chips, according to the sources who were not authorized to speak to media and declined to be identified. For comparison purposes, Nvidia sold around 1 million H20 chips in 2024, according to U.S. research firm SemiAnalysis. Nvidia CEO Jensen Huang said during a trip to Beijing this month that the level of H20 orders it received would determine whether production would begin again, adding that any restart to the supply chain would take nine months. The Information reported after Huang's trip that Nvidia had told customers it had limited H20 stocks available and it had no immediate plans to restart wafer production for the GPU. Nvidia needs to obtain export licenses from the U.S. government to ship the H20 chips. It said in mid-July it had been assured by authorities that it would get them soon. The U.S. Department of Commerce has yet to approve those licenses, one of the sources and a third source said. Nvidia on Monday declined to comment on the new orders or the status of its license applications. TSMC declined to comment. The U.S. Commerce Department did not immediately respond to a request for comment. Nvidia has asked Chinese companies interested in purchasing Nvidia H20 chips to submit new documentation including order volume forecasts from clients, said one of the sources and a fourth source.
[20]
Nvidia's China-bound H20 AI chips face Beijing scrutiny over 'tracking' and security concerns
China is one of Nvidia's largest markets, particularly for data centers, gaming and artificial intelligence applications. While Nvidia has been given assurances by Washington that it will be allowed to resume exports of its made-for-China H20 general processing units, the AI chips may be met with increased scrutiny from Beijing. According to the Cyberspace Administration of China, Nvidia met with Beijing officials on Thursday regarding potential national security concerns posed by its H20 chips, which recently saw restrictions on their export lifted following an effective ban in April. Nvidia was requested "to clarify and submit relevant supporting documentation regarding security risks, including potential vulnerabilities and backdoors, associated with its H20 computing chips sold to China," according to a CNBC translation of a statement from CAC. In a post, the regulator said that Nvidia's computing chips were reported to have serious security vulnerabilities, also noting calls from U.S. lawmakers for mandatory tracking features to be placed on advanced chips exported from the country. In its statement, CAC added that American AI experts had already revealed that Nvidia's computing chips pose mature "tracking and positioning" and "remote shutdown" technologies. The statement appears to be referencing a report from Reuters in May that said Bill Foster, a Democrat lawmaker from Illinois, was planning to introduce legislation that would require advanced AI chipmakers like Nvidia to include a built-in location reporting system. Forester, who once worked as a particle physicist, and independent technical experts reportedly agreed that the technology to track chips was readily available, with much of it already built into Nvidia's chips. Forester's bill would also seek to give U.S. authorities the power to remotely shut down chips being used without proper licenses, in a measure to fight chip smuggling and export loopholes. Nvidia did not immediately respond to a request for comment from CNBC. In recent weeks, many American lawmakers have also taken issue with the reported rollback of restrictions on Nvidia's H20 chips, warning they will advance Beijing's AI capability.
[21]
China summons Nvidia over potential security concerns in H20 chips
Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. What just happened? Nvidia's relief at being allowed to resume export of its China-specific H20 chips may be short-lived. The country's cyberspace regulator says that it met with Nvidia to discuss national security concerns related to the H20, including potential tracking and backdoors. The Cyberspace Administration of China (CAC) said that Nvidia was asked to "clarify and submit relevant supporting documentation regarding security risks, including potential vulnerabilities and backdoors, associated with its H20 computing chips sold to China." CAC was said to be worried that Chinese user data and privacy rights could be affected. During an AI summit in Washington last week, Nvidia was given permission to resume sales of its H20 data center GPUs in China. The company was forced to stop sales of the chip, which is designed to stay below the US performance-density threshold, in April - a pause that cost Nvidia a $4.5 billion write-off. The White House reportedly restarted the sales to prevent China from overtaking the US in the global chip race. US politicians have been pushing for a system that tracks Nvidia chips that are being smuggled into China, bypassing the US export bans. Experts say that much of the technology needed for this real-time tracking is already integrated into the chips. Republican Senator Tom Cotton and a bipartisan group of eight Representatives added the requirement to the US Chips Security Act, introduced in May. CAC noted these calls in its post. It added that American AI experts had revealed that Nvidia's chips pose mature "tracking and positioning" and "remote shutdown" technologies. Following his meeting with Trump, Nvidia CEO Jensen Huang made a visit to Beijing where he reaffirmed the company's commitment to the market and praised China's advances in the AI field. He also used the event to announce that sales of the H20 were expected to restart in the country. Nvidia is believed to have placed an order for 300,000 chips with TSMC this week to meet demand for the H20 from Chinese buyers. CAC never said what the Chinese government was considering should it decide that the H20 does pose a risk. Given that Trump blacklisted Huawei in his first term over national security threats, Nvidia and Huang are likely sweating right now.
[22]
China sees surge in Nvidia AI chip repair businesses despite export bans
In brief: There's a strange situation occurring in China: despite Nvidia's high-end AI chips being restricted from export to the country, businesses that repair these GPUs are experiencing a boom in demand. One company now handles up to 500 AI chip repairs every month. The US has restricted the export of Nvidia's most powerful AI chips to China since 2022 over fears that they could be used for military purposes. Although these chips aren't officially available in the Asian nation, a booming repair business has emerged. Reuters reports that one firm in the country, which began fixing gaming GPUs 15 years ago and started including AI chips in 2024, created a new company to handle all accelerator-related customer repairs, which now account for 500 repairs per month. The company has been advertising its extensive facilities on social media. It even boasts a room that can pack 256 servers to simulate customers' data center environments. It's a lucrative business, with the firm charging between 10,000 yuan and 20,000 yuan ($1,400 to $2,800) to fix one of these GPUs depending on the complexity of the repair. The report highlights how another Shenzhen-based firm decided to pivot its business from GPU rentals to repairs this year. It can handle 200 Nvidia AI chip repairs each month, charging around 10% of the GPUs' original selling price per repair. The H100 goes for between $45,000 and $53,000, and the A100 between $20,000 and $30,000 on black market sites in China. Washington first forced Nvidia to pull its A100 and H100 AI accelerators from the Chinese market in September 2022. Successive clampdowns have widened the blacklist to cover the China-specific A800 and H800, the L40/L40S, and even the RTX 4090 under an October 2023 rule. In April 2025, the new Hopper H200 and Blackwell parts - including the B100 and B200 - along with any servers or racks built around them were also restricted. Nvidia did have something to celebrate this week when it was given permission to resume sales of its H20 data center GPUs in China. The company was forced to stop sales the chip, which is designed to stay below the US performance-density threshold, in April -- a pause that cost Nvidia a $5.5 billion write-off. Commerce Secretary Howard Lutnick said the ban was reversed because the H20 is no longer Nvidia's fastest product. Many of these chips are smuggled into China, leading to US politicians recently calling for an effective method to track the GPUs. We've also seen stories about resellers in other countries selling servers to Chinese firms that are filled with Nvidia AI GPUs.
[23]
China Summons Nvidia Over 'Backdoor Security' Risks of A.I. Chips
China's internet regulator, the Cyberspace Administration of China, announced on Thursday that it had summoned Nvidia to explain security risks associated with one of its artificial intelligence chips developed for the Chinese market. The regulator said it had requested that Nvidia explain "backdoor security risks associated with its H20 computing chips sold to China and submit relevant supporting documentation," citing information it said had been revealed by "U.S. artificial intelligence experts" that the company's chips could be shut down remotely or used to track a user's location. The H20 has been at the center of the increasingly heated contest between the United States and China for primacy over artificial intelligence. Earlier this month, Nvidia's chief executive, Jensen Huang, persuaded the Trump administration to lift an earlier ban on sales of the chip to China, in a remarkable reversal of a yearslong effort by officials in Washington to slow Beijing's technological and military progress. Mr. Huang met in recent weeks with senior officials in both Washington and Beijing, where he repeated his argument that American technology companies must do business in China to stay competitive. Former top officials in the administration of President Joseph R. Biden Jr. have warned that allowing Nvidia to sell the chips in China could set Chinese companies up to gain an irreversible dominance over artificial intelligence. The H20 is not Nvidia's most powerful chip, but it is coveted by Chinese companies for use in artificial intelligence systems. The reversal comes at a crucial time when Chinese A.I. companies are working to improve their technology and catch up to American rivals. China accounted for $17 billion of Nvidia's revenue during its last fiscal year, according to the advisory firm Bernstein Research, and Mr. Huang has previously said that the company expected to sell billions of dollars of chips in China this year. In Beijing earlier this month, Mr. Huang declined to estimate exactly how many H20 chips would now be sold in China. Nvidia did not immediately respond to a request for comment. Siyi Zhao contributed research from Beijing.
[24]
Smuggled NVIDIA chips flood China despite US export crackdown
Jensen Huang, CEO of NVIDIA, speaks to journalists during a trip to China. Despite U.S. efforts to block access to cutting-edge AI chips, Chinese companies continue to acquire them through underground channels. A Financial Times investigation has found that over $1 billion worth of NVIDIA B200s and other restricted chips have made their way into China since the U.S. introduced tighter export controls in April 2025. President Donald Trump's administration had banned the export of China-specific H20 chips from NVIDIA and similar products from AMD, citing national security concerns. But the restrictions appear to have backfired, igniting a thriving black market for NVIDIA's more powerful B200 processors.
[25]
China summons Nvidia over backdoor security concerns with AI chips
The cyberspace regulator in Beijing said it questioned Nvidia over its H20 chips, which Washington only recently allowed to resume being exported to China. China's cyberspace regulator said Thursday that it had summoned representatives of U.S. tech giant Nvidia to explain alleged security vulnerability risks involving its highly sought-after H20 artificial intelligence chips. This comes barely two weeks after the Trump administration suddenly reversed its ban and allowed the Silicon Valley company to resume exports of the chips to China, part of broader de-escalation ahead of trade talks. "Recently, Nvidia's computing chips were revealed to have serious security issues," the Cyberspace Administration of China said in a statement. The agency specifically took concern with "tracking and positioning functions" in H20 chips, which it said U.S. lawmakers have called for in advanced chips that are exported, as well as "remote shutdown" technologies. H20 chips, or H20 graphic processing units, are used to build and update a range of AI systems. Nvidia specifically designed them for the Chinese market and to comply with U.S. export controls. Nvidia did not immediately respond to a request for comment. The Cyberspace Administration of China asked Nvidia for "an explanation regarding the security risks of vulnerabilities and back doors" of H20 chips, it said on Thursday, and requested the multinational tech company to submit "relevant supporting materials." The U.S. Commerce Department restricted Nvidia from selling the chips to China in April, saying the move was intended to safeguard "national and economic security." At the time, Sen. Elizabeth Warren (D-Massachusetts) warned that H20 exports would allow China to build "more cutting-edge data centers," causing the United States to fall behind. But the Trump administration reversed course earlier this month and allowed Nvidia to resume exporting the H20 chips to China. Explaining the decision, Commerce Secretary Howard Lutnick said on CNBC that the administration changed course because the H20 chip wasn't among Nvidia's most cutting-edge technology, and it wanted China to still be "addicted" to using the American technology ecosystem. This was an argument promoted by Jensen Huang, Nvidia's chief executive, when he visited President Donald Trump in the White House earlier this month, before departing for Beijing. Democratic lawmakers have sharply criticized the "abrupt and inexplicable decision to reverse course and allow the sale of certain advanced semiconductors," reflecting concerns within both parties about longer-term security ramifications. Nvidia, which became the first publicly traded company to close at a $4 trillion market capitalization this month, makes chips necessary to train the most advanced AI models. China, home to a slew of leading artificial intelligence firms and a rich ecosystem of developers, is an important market for the firm: About 13 percent of Nvidia's revenue came from China last year, according to company filings. But Nvidia's business in China has spurred concern in Washington, where some are concerned that selling chips to China could be helping Beijing's military and could degrade the U.S.'s position in global high-tech competition. Eva Dou and Katrina Northrop contributed to this report.
[26]
China probes Nvidia H20 chip over security concerns
Officials in China said Thursday that they had summoned Nvidia representatives over concerns with its H20 artificial intelligence chip. In a statement, China's internet regulator pointed to "serious security issues" with the semiconductors, including "mature tracking and location and remote shutdown technologies." The move casts doubt over the U.S. tech giant's sales prospects in China after President Donald Trump's administration reversed its ban on exporting the chips to the country. The reversal was part of a broader de-escalation between the two countries ahead of a potential fall summit between Trump and Chinese President Xi Jinping. In April, the U.S. Commerce Department banned Nvidia from selling the chips to China, citing the need to safeguard "national and economic security." But Commerce Secretary Howard Lutnick told CNBC that the administration changed course so that China would still be "addicted" to using U.S. technology. The latest move by the Cyberspace Administration of China (CAC) appears to cast doubt on whether that will happen, as the regulator pointed to proposed measures in the Chip Security Act. Under the bill, introduced in the House and Senate in May, AI chips under export restrictions would need to have location-tracking systems to protect against misuse. The CAC said Thursday that it had summoned Nvidia representatives to "explain the backdoor security risks" with the semiconductors and "submit relevant supporting documentation." It said the move was part of a bid to "safeguard the network and data security of Chinese users." Nvidia did not immediately respond to a request for comment. The Santa Clara, California-based company produces components that are essential for training the most advanced AI models. It specifically designed its H20 chips for the Chinese market, which accounted for approximately 13% of Nvidia's revenue last year, according to company filings. The company took a $4.5 billion writedown on unsold H20 chips in May and stated that sales in its most recent financial quarter would have been $2.5 billion higher if export bans had not been in place. But the decision to overturn the ban sparked criticism from Democrats earlier in July, who called it "abrupt and inexplicable" and raised security concerns, according to the Washington Post.
[27]
$1 billion worth of Nvidia AI chips smuggled into China
At least $1 billion worth of Nvidia's restricted AI chips were smuggled into China after the Trump administration further constricted chip exports, according to a report. Chinese distributors began selling Nvidia's restricted B200 chip to data centers for Chinese AI groups in May, per documents reviewed by the Financial Times. Based on document analysis and sources familiar with the deals, the outlet found that Nvidia's B200 chip is the most "sought-after" and "widely available" chip on China's black market for American chips. There was "no evidence" that Nvidia had taken part in the sale of smuggled chips, FT noted. "Trying to cobble together data centres from smuggled products is a losing proposition, both technically and economically," Nvidia told the FT. "Data centres require service and support, which we provide only to authorised Nvidia products." A company based in Anhui was found to be one of the biggest sellers of Nvidia's B200, reportedly including the restricted chips in "ready-built racks" -- for $489,000 per rack -- to be immediately used at data centers with nearly $400 million worth of racks were sold since mid-May by the business and its affiliates. While those B200 racks were discovered to be originally from an American assembler, Supermicro, the FT also didn't find any evidence that the company was involved in any smuggling of its products in China. Nvidia said in a blog post on July 14 that the Trump administration would allow the chip producer to continue selling its H20 AI chips to China after the Commerce Department had blocked sales in April. The H20 was supposed to be Nvidia's big workaround for restrictions on sales of powerful AI hardware to China. When the U.S.tightened export rules last year, Nvidia responded by launching this lower-spec version of its flagship GPU designed to fall just under those limits. Shortly after the U.S. lifted restrictions on Nvidia's H20, CEO Jensen Huang started pushing for permission to sell more advanced processors to the world's second-largest economy. While Washington debates easing restrictions on chip exports to China, its black market is thriving, making policy discussion largely academic. Research from the Center for a New American Security (CNAS) estimates that between 10,000 and several hundred thousand banned Nvidia chips may have been smuggled to China in 2024 alone. Chinese firms are already planning to install more than 115,000 restricted Nvidia AI chips in some three dozen data centers across the country's western deserts -- chips they cannot legally purchase without U.S. government licenses that haven't been granted. The smuggling operation appears sophisticated and widespread. One smuggler reportedly handled an order worth $120 million for servers containing 2,400 banned Nvidia H100s destined for China, according to The Information. Chinese businessmen have openly bragged online about obtaining hundreds of restricted H200 GPUs, while authorities in Singapore arrested three people suspected of diverting AI servers worth $390 million. Huang has consistently maintained there's "no evidence of any AI chip diversion," arguing that the massive servers are "nearly two tons" and easy to track. But Commerce Under Secretary Jeffrey Kessler directly contradicted those claims. "It's happening," he told lawmakers earlier this year. "It's a fact." The smuggling networks have become increasingly sophisticated. As of this month, more than 70 distributors were openly marketing restricted processors, with many offering delivery within weeks. The chips flow through a complex web of shell companies, third-party resellers, and intermediaries across Southeast Asia. Malaysia has emerged as a particular concern, with the country's imports of advanced GPUs surging over 3,400% in early 2025, prompting new permit requirements for AI chip exports. Malaysian authorities have said they "will not tolerate the misuse of Malaysia's jurisdiction for illicit trading activities." Smugglers have used creative methods to move the hardware, including hiding chips in shipments labeled as tea or toys, and even packing them alongside live lobsters. Despite the logistical challenges, the evidence suggests the networks are moving substantial quantities of hardware across borders.
[28]
Nvidia's flagship chips pour into China via gray channels: US$1B smuggled in 3 months
Despite stricter AI chip export controls under the Trump administration, over US$1 billion worth of Nvidia's high-end GPUs have reportedly entered China through black-market channels in just three months, raising doubts about the efficacy of US trade restrictions. Citing the Financial Times, reports from Reuters, CNBC, The Register, and Tom's Hardware say Nvidia's B200 chips, officially restricted from export to China, are now widely circulating in the country. Since May, local vendors have been openly promoting the GPUs on TikTok and RedNote, offering testing services and after-sales support. The chips are typically sold as turnkey server racks, preloaded with software and multiple processors, and marketed to data center vendors serving China's AI sector. Each rack, containing eight B200 GPUs, is priced between CNY3 million and 3.5 million (approx. US$420,000 to US$490,000), a 50% markup over standard pricing. A distributor named Gate of the Era is reportedly responsible for selling several hundred of these server systems, with total sales nearing US$400 million. Although the US has eased some restrictions on Nvidia's lower-tier H20 chips, demand in China for premium models such as the B200, H100, and H200 remains robust. Third-party rerouting via Southeast Asia The chips are typically shipped from the US and passed through several intermediaries in Southeast Asia, especially Malaysia and Thailand, before entering China. While Chinese regulations allow for legal import with customs clearance and taxes, the grey zones in logistics have fueled a thriving black-market supply chain. An Nvidia spokesperson said building data centers with unauthorized chips is both technically and financially illegal, and confirmed the company only supports officially licensed products. The statement, however, did not directly address the scale of the black-market activity. Nvidia CEO Jensen Huang has stated there is no concrete evidence of AI chip resales and has criticized the broadening of US export restrictions, arguing that such measures only accelerate China's drive for homegrown semiconductor development. Startups like DeepSeek promote low-cost AI training alternatives, but most Chinese-developed chips are still seen as replicas of older US GPUs and have yet to match the performance of Nvidia's top-tier offerings. Amid growing smuggling concerns, the US Department of Commerce is considering tougher export enforcement starting in September 2025. Nations like Thailand may face new compliance rules requiring a tighter supply chain and transshipment tracking. Singapore has already arrested three individuals suspected of chip smuggling. Analysts caution that despite US efforts to slow China's AI progress, high profit margins and strong demand continue to sustain an active black market. The situation undercuts US policy goals and adds pressure to Nvidia's global political and commercial balancing act. As US-China tensions intensify, tech companies are splitting paths. Nvidia remains engaged in policy negotiations to preserve access to China, while others, like Amazon and Microsoft, are steadily scaling back. With geopolitical and commercial interests intertwined, the AI chip war is far from over.
[29]
Financial Times report suggests chip smugglers shifted an alleged $1 billion worth of Nvidia's AI chips to China over the course of 3 months while stricter US export controls were in effect
"There is no evidence that [Nvidia] is involved in, or has knowledge of, its restricted products being sold to China." The Financial Times recently published an investigation into chip exports during an early three-month phase in the Trump administration, when export controls were being tightened to prevent the sale of high-powered US AI hardware to China. According to the FT, at least $1 billion worth of Nvidia GPUs were shipped to those sanctioned shores during this period, although the exact method of their entry is under dispute. The FT says that it analysed "dozens of sales contracts, company filings, and multiple people with direct knowledge of the deals" in order to come to the conclusion that Nvidia's B200 AI GPU was the most widely available product in what it describes as a "rampant" Chinese black market, without Nvidia's apparent knowledge. The investigation concludes that in the three month period prior to Trump's recent easing of restrictions on Nvidia chip exports, Chinese distributors from the Gungdong, Zhejiang and Anhui provinces allegedly sold multiple models of Nvidia AI chips, including the B200, H100, and H200, in potentially vast numbers. The chips were allegedly sold in racks "about the size of a large suitcase" and packaged with the components and software needed to hook them directly into an existing data center. It's said that they were priced at around $489,000 per rack, which, the FT points out, would be a premium of around 50%, based on the average price of similar products in the US. The investigation also alleges that some Chinese sellers were openly marketing the racks on social media, with some providers offering testing of the illicit chips to prove it was a "plug-and-play" procedure to hook them into existing data center infrastructure. One distributor apparently described the wealth of vendors as "like a seafood market... there's no shortage." It's important to note that while it was (and still is) legal to receive restricted Nvidia chips in China, the entities selling and sending them would fall foul of the US regulations at the time. The FT points out that "there is no suggestion" that companies like Supermicro, Dell and Asus (whose product logos are said to be visible on packaging and installation images of the racks obtained by the FT) were aware of the social media advertising, or their products being sold in China. Similarly, Nvidia told the FT that there was "no evidence of any AI chip diversion" and the Financial Times confirms that it found no evidence that the company is involved in, or has knowledge of, its restricted products being sold. In May of this year, AI firm Anthropic warned of "sophisticated smuggling operations" of AI GPUs to China, "involving hundreds of millions of dollars worth of chips," a claim that Nvidia firmly dismissed. A company spokesperson told NBC that Anthropic was telling "tall tales", especially in regards to claims that "large, heavy, and sensitive electronics are somehow smuggled in 'baby bumps' or 'alongside live lobsters." Still, according to the FT, $1 billion worth of the highly-prized hardware looks like it might have made it into the hands of Chinese vendors anyway. Nvidia has recently filed applications to sell the H20 GPU in China once more, with assurance from the US government that the licenses will be granted, and the warm dialogue between President Trump and Nvidia CEO Jensen Huang in recent days seems to confirm a conflict-free relationship between the two. The first point of Trump's AI action plan references new export packages to "America's friends and allies around the world," so while sanctions may have been subverted in the past by unknown entities -- and who counts as America's friend is variable on any given day -- it looks like the official trade routes may be about to free up once more, hopefully making the need for some black markets a thing of the past.
[30]
China probes Nvidia over AI chip 'tracking' security risks
Nvidia CEO Jensen Huang in San Jose, California, on March 18.Josh Edelson / AFP via Getty Images While Nvidia has been given assurances by Washington that it will be allowed to resume exports of its made-for-China H20 general processing units, the AI chips may be met with increased scrutiny from Beijing. According to the Cyberspace Administration of China, Nvidia met with Beijing officials on Thursday regarding potential national security concerns posed by its H20 chips, which recently saw restrictions on their export lifted following an effective ban in April. Nvidia was requested "to clarify and submit relevant supporting documentation regarding security risks, including potential vulnerabilities and backdoors, associated with its H20 computing chips sold to China," according to a CNBC translation of a statement from CAC. In a post, the regulator said that Nvidia's computing chips were reported to have serious security vulnerabilities, also noting calls from U.S. lawmakers for mandatory tracking features to be placed on advanced chips exported from the country. In its statement, CAC added that American AI experts had already revealed that Nvidia's computing chips pose mature "tracking and positioning" and "remote shutdown" technologies. The statement appears to be referencing a report from Reuters in May that said Bill Foster, a Democrat lawmaker from Illinois, was planning to introduce legislation that would require advanced AI chipmakers like Nvidia to include a built-in location reporting system. Forester, who once worked as a particle physicist, and independent technical experts reportedly agreed that the technology to track chips was readily available, with much of it already built into Nvidia's chips. Forester's bill would also seek to give U.S. authorities the power to remotely shut down chips being used without proper licenses, in a measure to fight chip smuggling and export loopholes. Nvidia did not immediately respond to a request for comment from CNBC. In recent weeks, many American lawmakers have also taken issue with the reported rollback of restrictions on Nvidia's H20 chips, warning they will advance Beijing's AI capability. This week, Nvidia reportedly placed orders for 300,000 H20 chipsets with contract manufacturer TSMC as it seeks to meet Chinese demand.
[31]
China summons chip giant Nvidia over alleged security risks
Beijing (AFP) - Chinese internet authorities summoned Nvidia on Thursday to discuss "serious security issues" over some of its artificial intelligence (AI) chips, as the US technology giant finds itself entangled in trade tensions between Beijing and Washington. Nvidia is a world-leading producer of AI semiconductors, but the United States effectively restricts which chips it can export to China on national security grounds. A key issue has been Chinese access to the "H20", a less powerful version of Nvidia's AI processing units that the company developed specifically for export to China. The California-based firm said earlier this month that it would resume H20 sales to China after Washington pledged to remove licensing curbs that had halted exports. But the firm still faces obstacles -- US lawmakers have proposed plans to require Nvidia and other manufacturers of advanced AI chips to include built-in location tracking capabilities. And on Thursday, Beijing's top internet regulator said it had summoned Nvidia representatives to discuss recently discovered "serious security issues" involving the H20. The Cyberspace Administration of China said it had asked Nvidia to "explain the security risks of vulnerabilities and backdoors in its H20 chips sold to China and submit relevant supporting materials". The statement posted on social media noted that, according to US experts, location tracking and remote shutdown technologies for Nvidia chips "are already matured". The announcement marked the latest complication for Nvidia in selling its advanced products in the key Chinese market, where it is in increasingly fierce competition with homegrown technology firms. Nvidia committed CEO Jensen Huang said during a closely watched visit to Beijing this month that his firm remained committed to serving local customers. Huang said he had been assured during talks with top Chinese officials during the trip that the country was "open and stable". "They want to know that Nvidia continues to invest here, that we are still doing our best to serve the market here," he said. Nvidia this month became the first company to hit $4 trillion in market value -- a new milestone in Wall Street's bet that AI will transform the global economy. New hurdles to the firm's operation in China come as the country's economy wavers, beset by a years-long property sector crisis and heightened trade headwinds under US President Donald Trump. Chinese President Xi Jinping has called for the country to enhance self-reliance in certain areas deemed vital for national security -- including AI and semiconductors -- as tensions with Washington mount. The country's firms have made great strides in recent years, with Huang praising their "super-fast" innovation during his visit to Beijing this month.
[32]
$1 Billion Worth of NVIDIA GPUs Smuggled to China after Trump Export Controls: Report | AIM
NVIDIA's Blackwell B200 GPU was widely made available in Chinese markets. At least $1 billion worth of NVIDIA GPUs were smuggled to China, according to a report by The Financial Times (FT) on July 24. The development occurred after US President Donald Trump took office and tightened the country's export controls. FT's analysis of sales contracts, company filings, and insights from individuals familiar with the deals showed that the company's B200 systems were the most in-demand and commonly accessible chip in China's 'black market'. NVIDIA's B200 is a GPU based on the company's high-end Blackwell architecture. These chips are widely used across various hardware systems by AI companies such as OpenAI, Google, Meta, Microsoft, and others. The direct sales of this chip are prohibited in China, as the US government has placed harsh restrictions on companies exporting advanced AI hardware. The report revealed that a company in China claimed to have more than 100 business partners, including AliCloud, ByteDance's Huoshan Cloud, and Baidu Cloud. Additionally, the report also revealed that most of the B200 racks sold by a Chinese company originated from Supermicro, a US-based company. "Packaging and installation pictures and videos seen by the FT show product logos of companies such as Supermicro, Dell and Asus," read the report. All of these companies are hardware infrastructure providers with NVIDIA chips embedded in their servers. Besides, Hopper GPUs, a generation of chips preceding the Blackwell architecture, were sold in these markets. Due to various administrative restrictions, NVIDIA was barred from selling its high-performance Hopper generation GPUs, such as the H100, H200, and H20 systems. Recently, the company announced that the Trump administration has approved the sale of the H20 chip again. Note that the company developed this version to comply with Biden-era regulations by modifying certain system specifications, which were previously deemed too powerful for export to China. Read More: The Wild Ways China Smuggles NVIDIA Chips These developments have taken place despite various measures implemented by government administrations to curb illegal exports to China through South Asian countries.
[33]
Nvidia denies its chips have backdoors after China raises security risks over H20
The Cyberspace Administration of China, the country's internet regulator, said it was concerned by a U.S. proposal for advanced chips sold abroad to be equipped with tracking and positioning functions. The CAC's move cast uncertainty over the U.S. company's sales prospects in China weeks after a U.S. export ban was reversed. The regulator said it had summoned Nvidia to a meeting on Thursday to explain whether its H20 AI chip had any backdoor security risks, as it was worried that Chinese user data and privacy rights could be affected. A backdoor risk refers to a hidden method of bypassing normal authentication or security controls. In a statement, an Nvidia spokesperson said, "Cybersecurity is critically important to us. Nvidia does not have 'backdoors' in our chips that would give anyone a remote way to access or control them."
[34]
China's GPU Demands are Driving NVIDIA to Order 3,00,000 H20s | AIM
This comes just after NVIDIA resumes sales of H20 chips to China. NVIDIA has placed orders for 3,00,000 H20 chips to be manufactured by TSMC, its contract manufacturer for AI chips. According to recent reports, this is due to the high demand for these processors in the Chinese market, resulting from the company's recent announcement to resume shipments of the H20 chips to China. Following the ban last year, Chinese firms had reported severe shortages, and NVIDIA had warned of a potential $5.5 billion hit to its bottom line in 2025. This was soon revoked this month when NVIDIA CEO Jensen Huang, fresh from diplomatic visits to Washington and Beijing, confirmed that deliveries would begin quickly. Now that they have, the demand is driving NVIDIA to order more and more from its manufacturer. Big tech companies in China, such as ByteDance, Alibaba, and DeepSeek, have significantly benefited from the lifting of this ban. ByteDance, Alibaba, and Tencent were also recently reported to have collectively placed orders worth $16 billion for NVIDIA's H20 GPUs. R2, the successor to DeepSeek's widely used R1, which has yet to receive a release date, may have been potentially delayed due to this ban. Retrospectively, this demand for H20 AI chips from NVIDIA for the Chinese market could potentially accelerate TSMC's growth. The manufacturing giant recently reached a market capitalisation of approximately $1.03 trillion, matching that of electric carmaker Tesla in valuation. As of July 22, TSMC's stock stood at TWD 1,130, with a high of TWD 1,160 and 0.89% growth over the past five trading days. TSMC became only the third semiconductor company, after NVIDIA and Broadcom, to hit the $1 trillion mark. Despite the ban, NVIDIA chips remain highly in demand in China. Many reports in recent months have detailed various methods by which these chips were being smuggled into the country. Especially after the Trump administration's export controls, at least $1 billion worth of NVIDIA GPUs were smuggled to China.
[35]
China summons Nvidia over 'backdoor safety risks' in H20 chips
WASHINGTON -- China's cyberspace regulators on Thursday summoned Nvidia over security concerns that its H20 chips can be tracked and turned off remotely, the Cyberspace Administration of China said on its website. In the meeting, Chinese regulators demanded that the U.S. chip company provide explanations on "backdoor safety risks" of its H20 chips to be sold in China and submit relevant materials, the office said. "Cybersecurity is critically important to us. NVIDIA does not have 'backdoors' in our chips that would give anyone a remote way to access or control them," an Nvidia spokesperson said in a statement to AP. It came just about two weeks after the Trump administration lifted the block on the computing chips and allowed Nvidia to resume sales of H20 chips to the Chinese market. Jensen Huang, chief executive of Nvidia, made the announcement with fanfare when he was in Beijing earlier this month. The latest episode appears to be another turbulence in the tech rivalry between the United States and China, which have left businesses in both countries tussling with governments over market access and national security concerns. Any safety concern by Beijing could jeopardize the sale of H20 chips in China. Citing unnamed U.S. AI experts, the Chinese regulators said Nvidia has developed mature technology to track, locate and remotely disable its computing chips. The regulators summoned Nvidia to "safeguard the cybersecurity and data security of Chinese users," in accordance with Chinese laws, the statement said. The statement also referred to a call by U.S. lawmakers to require tracking and locating capabilities on U.S. advanced chips sold overseas. In May, Rep. Bill Huizenga, R.-Michigan, and Rep. Bill Foster, D.-Illinois, introduced the Chip Security Act that would require high-end chips to be equipped with "security mechanisms" to detect "smuggling or exploitation." The bill has not moved through Congress since its introduction. Foster, a trained physicist, then said, "I know that we have the technical tools to prevent powerful AI technology from getting into the wrong hands." The U.S. still bans the sale to China of the most advanced chips, which are necessary for developing artificial intelligence. Both countries aim to lead in the artificial intelligence race. The Trump administration in April blocked the sales of H20 chips, which Nvidia developed to specifically comply with U.S. restrictions for exports of AI chips to China. After the ban was lifted, Nvidia expected to sell hundreds of thousands more H20 chips in the Chinese market. But the easing of the ban has raised eyebrows on Capitol Hill. On Monday, a group of top Democratic senators, including Minority Leader Sen. Chuck Schumer, wrote to Commerce Secretary Howard Lutnick to express their "grave concerns". While chips like the H20 have differing capabilities than the most advanced chips such as Nvidia's H100, "they give (China) capabilities that its domestically-developed chipsets cannot," the senators wrote. Shortly after the ban was lifted, Rep. John Moolenaar, R.-Michigan, who chairs the House Select Committee on China, objected. "The Commerce Department made the right call in banning the H20. Now it must hold the line," Moolenaar wrote in a letter to Lutnick. "We can't let the CCP use American chips to train AI models that will power its military, censor its people, and undercut American innovation," Moolenaar wrote, referring to the Chinese Communist Party by its acronym.
[36]
China summons Nvidia over 'backdoor safety risks' in H20 chips
WASHINGTON (AP) -- China's cyberspace regulators on Thursday summoned Nvidia over security concerns that its H20 chips can be tracked and turned off remotely, the Cyberspace Administration of China said on its website. In the meeting, Chinese regulators demanded that the U.S. chip company provide explanations on "backdoor safety risks" of its H20 chips to be sold in China and submit relevant materials, the office said. "Cybersecurity is critically important to us. NVIDIA does not have 'backdoors' in our chips that would give anyone a remote way to access or control them," an Nvidia spokesperson said in a statement to AP. It came just about two weeks after the Trump administration lifted the block on the computing chips and allowed Nvidia to resume sales of H20 chips to the Chinese market. Jensen Huang, chief executive of Nvidia, made the announcement with fanfare when he was in Beijing earlier this month. The latest episode appears to be another turbulence in the tech rivalry between the United States and China, which have left businesses in both countries tussling with governments over market access and national security concerns. Any safety concern by Beijing could jeopardize the sale of H20 chips in China. Citing unnamed U.S. AI experts, the Chinese regulators said Nvidia has developed mature technology to track, locate and remotely disable its computing chips. The regulators summoned Nvidia to "safeguard the cybersecurity and data security of Chinese users," in accordance with Chinese laws, the statement said. The statement also referred to a call by U.S. lawmakers to require tracking and locating capabilities on U.S. advanced chips sold overseas. In May, Rep. Bill Huizenga, R.-Michigan, and Rep. Bill Foster, D.-Illinois, introduced the Chip Security Act that would require high-end chips to be equipped with "security mechanisms" to detect "smuggling or exploitation." The bill has not moved through Congress since its introduction. Foster, a trained physicist, then said, "I know that we have the technical tools to prevent powerful AI technology from getting into the wrong hands." The U.S. still bans the sale to China of the most advanced chips, which are necessary for developing artificial intelligence. Both countries aim to lead in the artificial intelligence race. The Trump administration in April blocked the sales of H20 chips, which Nvidia developed to specifically comply with U.S. restrictions for exports of AI chips to China. After the ban was lifted, Nvidia expected to sell hundreds of thousands more H20 chips in the Chinese market. But the easing of the ban has raised eyebrows on Capitol Hill. On Monday, a group of top Democratic senators, including Minority Leader Sen. Chuck Schumer, wrote to Commerce Secretary Howard Lutnick to express their "grave concerns". While chips like the H20 have differing capabilities than the most advanced chips such as Nvidia's H100, "they give (China) capabilities that its domestically-developed chipsets cannot," the senators wrote. Shortly after the ban was lifted, Rep. John Moolenaar, R.-Michigan, who chairs the House Select Committee on China, objected. "The Commerce Department made the right call in banning the H20. Now it must hold the line," Moolenaar wrote in a letter to Lutnick. "We can't let the CCP use American chips to train AI models that will power its military, censor its people, and undercut American innovation," Moolenaar wrote, referring to the Chinese Communist Party by its acronym.
[37]
NVIDIA GB200 AI servers smuggled into China, despite their two-ton weight
TL;DR: Over $1 billion worth of NVIDIA AI hardware, including GB200 AI servers and H100 GPUs, has been smuggled into China despite US export bans. Chinese black markets and distributors use trade loopholes and grey channels to supply high-end NVIDIA AI systems, highlighting challenges in enforcing chip export controls. NVIDIA AI hardware worth over $1 billion has been smuggled into China, even the huge GB200 AI servers that weigh up to two tons, in the middle of a chip ban. NVIDIA GB200 AI servers and AI GPUs are always available on Chinese black markets, with a new report from the Financial Times claiming that over $1 billion of AI hardware has ended up on China's AI black markets since the US government imposed strict export controls, including NVIDIA GB200 AI servers. The Financial Times has had eyes-on with multiple sales contracts and filings, revealing that China's AI black markets are most interested in the NVIDIA GB200 AI servers, and that they're available in local markets. The US government banned the H20 AI GPU and quickly after the H20 banned, distributors were still getting their hands on them through multiple means: trade loopholes or grey channels that haven't been fixed by the US government. The outlet reports that several Chinese provinces have a significant inventory of NVIDIA AI chips ready, including the B200, H100, and H200 AI GPUs. Chinese companies are reportedly accessing NVIDIA AI GPUs through distributors that have centers in regions like Singapore, where these AI systems are labelled under Supermicro (SMI) packaging. AI systems are available on various Chinese retail platforms, with many of these sellers even running and showing live tests of the AI racks to show the systems are legitimate. With China having high-end AI compute being sold easily on multiple platforms, it shows US export controls haven't stopped the high-end NVIDIA AI hardware from entering the country. The biggest takeaway here is the rumor that Chinese customers are getting their hands on NVIDIA GB200 AI systems, which are not only the most sought-after AI platforms on the planet, but weigh two tons. The Financial Times wouldn't verify GB200 AI servers on Chinese markets, but many vendors are publicly confirming that Grace Blackwell AI systems are available.
[38]
$1 billion NVIDIA AI GPU black market smuggling ring unveiled by investigation
TL;DR: A Financial Times investigation reveals over $1 billion worth of banned NVIDIA AI GPUs were smuggled into China during early US export restrictions, with Chinese distributors marketing high-priced, plug-and-play GPU racks. NVIDIA denies involvement, while recent US approvals may reduce black market GPU sales. A new investigation has been published into the smuggling of banned NVIDIA GPUs into China during the early stages of the Trump administration's tightening of export restrictions. The report states that at least $1 billion of high-powered NVIDIA AI hardware was smuggled to China, circumventing the newly implemented US trade restrictions. The report comes from the Financial Times, which states that a billion dollars worth of NVIDIA GPUs were shipped to China during the three months before Trump eased the trade restrictions with the nation, with the report citing "dozens of sales contracts, company filings, and multiple people with direct knowledge of the deals." More specifically, Chinese distributors from the Guangdong, Zhejiang, and Anhui provinces are alleged to have sold various NVIDIA AI GPUs in large quantities, including the B200, H100, and H200. These GPUs were sold and moved in racks that were approximately the size of a "large suitcase" and contained all of the necessary components to integrate them directly into an existing data center. Each of these "racks" was valued at approximately $489,000, which means the price was jacked up by at least 50% when compared to the average retail value in the US. Furthermore, the report claims that Chinese sellers were openly marketing the smuggled GPUs on social media, touting a "plug-and-play" functionality and even offering to showcase how easily they can be installed by hooking them up to an existing data center. The FT report states that NVIDIA said there was "no evidence of any AI diversion" and that NVIDIA didn't have any knowledge of the smuggling, nor was involved in the sale of the restricted products. In early May, AI company Anthropic alleged that US export controls on AI GPUs spawned sophisticated Chinese smuggling tactics that involved AI GPUs being placed "alongside live lobsters" and within "prosthetic baby bumps". Anthropic also alleged that the trade restrictions resulted in hundreds of millions of dollars worth of banned US-exported processors entering the country. NVIDIA responded to these claims, saying Anthropic was telling "tall tales". It was only last week that NVIDIA announced that the US government has granted the company approval for selling AI GPUs to Chinese customers, following the US ban on the AI accelerators. NVIDIA stated that it filed applications to sell the H20 GPU in China, and assured that it would be granted the license from the US government to begin sales once again. Presumably, once the approval has gone through and the license granted, black market sales of the same GPU will dramatically drop in price.
[39]
Nvidia orders 300K H20 chips as China demand soars
Political backlash is intensifying as Nvidia ramps up H20 shipments to China despite national security concerns. Nvidia has placed a new order with TSMC for 300,000 H20 AI GPUs following unexpectedly strong demand from Chinese technology companies, according to Reuters. This decision comes after the Trump administration reversed an April ban on the H20 chip, which is specifically designed to comply with U.S. export controls while still being capable of handling demanding AI inference tasks. Nvidia's current course represents a shift from previous statements. Nvidia CEO Jensen Huang, during a visit to Beijing, suggested that H20 production would remain suspended unless significant customer demand justified resuming production. Restarting production was estimated to take nine months. However, the company is now moving forward with additional orders given that its existing stockpiles of between 600,000 and 700,000 H20 units are rapidly decreasing. Reports of smuggling and a growing repair market for GPUs that are subject to bans have also influenced the decision. The H20 GPU is designed for AI inference tasks. Though it lacks the raw power of Nvidia's flagship H100 or the newer Blackwell series, industry experts have noted that it is specifically tuned for AI inference workloads. Some go so far as to assert that it can outperform the H100 in particular applications. Prior to the April ban, major Chinese technology companies, including Tencent, ByteDance, and Alibaba, had already accumulated substantial supplies of the H20, often using them with DeepSeek's cost-optimized AI models. Despite the reversal of the ban, the U.S. government maintains oversight regarding export controls. Nvidia is still required to obtain export licenses for H20 shipments to China. Sources have indicated that the Commerce Department has not yet approved these licenses. Nvidia is requesting that Chinese customers provide detailed order forecasts and documentation, which indicates a strategy for stricter distribution control. The financial implications for Nvidia are substantial. Following the April ban, the company cautioned about a potential $5.5 billion inventory write-off and an additional $15 billion in lost sales. Nvidia's total H20 sales in 2024 were approximately 1 million units, making the current TSMC order for 300,000 units nearly one-third of the previous year's total volume. Political opposition to Nvidia's strategy is increasing in the United States. Twenty U.S. national security experts, including former officials from both the Bush and Trump administrations, have urged the Commerce Department to reinstate the ban on the H20. These experts argue that the H20's inference capabilities could significantly advance China's AI capabilities. The letter sent to the Commerce Department states that H20's performance could strengthen Chinese military AI efforts and undermine U.S. export control policies. Jensen Huang has previously expressed disagreement with such concerns. Nvidia believes that maintaining a strong presence in China's software ecosystem is crucial for its long-term market dominance. The company fears that if Chinese developers fully transition to competing solutions, such as those offered by Huawei, the long-term consequences could exceed any short-term political repercussions. While the H20 is not Nvidia's most powerful chip, it has taken on an outsized role in the context of U.S.-China technology competition and geopolitical strategy.
[40]
China summons Nvidia to address 'serious security issues' with chips
Hong Kong | Beijing has summoned Nvidia over alleged security issues with its chips, in a blow to the US company's push to revive sales in the country after Washington granted approval for the export of a chip tailor-made for China. China's cyber regulator on Thursday said it had called in Nvidia for a meeting over alleged "serious security issues" with the company's artificial intelligence chips. It said US AI experts had "revealed that Nvidia's computing chips have location tracking and can remotely shut down the technology".
[41]
Nvidia AI Chips Worth $1 Billion Entered China Despite US Curbs, FT Reports
(Reuters) -Nvidia's advanced artificial intelligence chips worth at least $1 billion were smuggled to China in the three months after Washington tightened chip export controls, the Financial Times reported on Thursday. The AI chip designer's high-end B200 processors, banned for sale in China, is widely available on a thriving Chinese black market for U.S. chips, the report said, citing sales contracts, company filings and multiple people with direct knowledge of the deals. Nvidia told Reuters that building data centers with smuggled products is inefficient both technically and financially, as the company only offers service and support for authorized products. The U.S. Department of Commerce, White House and Thai government did not immediately respond to requests for comment. Reuters could not independently verify the FT report. In May, multiple Chinese distributors started selling B200s to suppliers of data centers that serve Chinese AI groups, according to the report. The U.S. and China are battling for global dominance in AI and other cutting-edge technologies, triggering a tightrope walk for companies such as Nvidia between the world's two largest economies. Nvidia last week said it would be allowed to resume sales to China after the Trump administration reversed an export restriction on the sales of chips such as H20. The curbs were imposed in April. In the three months before that, Chinese distributors from Guangdong, Zhejiang and Anhui provinces sold Nvidia's B200s, as well as other restricted processors such as the H100 and H200, according to the report. Southeast Asian countries have become markets where Chinese groups obtained restricted chips, the report said, citing industry experts. The U.S. Commerce Department is discussing adding more export controls on advanced AI products to countries such as Thailand as soon as September, the report said. (Reporting by Jaspreet Singh in Bengaluru; Editing by Arun Koyyur)
[42]
China Summons Nvidia Over 'Backdoor Safety Risks' in H20 Chips
WASHINGTON (AP) -- China's cyberspace regulators on Thursday summoned Nvidia over security concerns that its H20 chips can be tracked and turned off remotely, the Cyberspace Administration of China said on its website. In the meeting, Chinese regulators demanded that the U.S. chip company provide explanations on "backdoor safety risks" of its H20 chips to be sold in China and submit relevant materials, the office said. "Cybersecurity is critically important to us. NVIDIA does not have 'backdoors' in our chips that would give anyone a remote way to access or control them," an Nvidia spokesperson said in a statement to AP. It came just about two weeks after the Trump administration lifted the block on the computing chips and allowed Nvidia to resume sales of H20 chips to the Chinese market. Jensen Huang, chief executive of Nvidia, made the announcement with fanfare when he was in Beijing earlier this month. The latest episode appears to be another turbulence in the tech rivalry between the United States and China, which have left businesses in both countries tussling with governments over market access and national security concerns. Any safety concern by Beijing could jeopardize the sale of H20 chips in China. Citing unnamed U.S. AI experts, the Chinese regulators said Nvidia has developed mature technology to track, locate and remotely disable its computing chips. The regulators summoned Nvidia to "safeguard the cybersecurity and data security of Chinese users," in accordance with Chinese laws, the statement said. The statement also referred to a call by U.S. lawmakers to require tracking and locating capabilities on U.S. advanced chips sold overseas. In May, Rep. Bill Huizenga, R.-Michigan, and Rep. Bill Foster, D.-Illinois, introduced the Chip Security Act that would require high-end chips to be equipped with "security mechanisms" to detect "smuggling or exploitation." The bill has not moved through Congress since its introduction. Foster, a trained physicist, then said, "I know that we have the technical tools to prevent powerful AI technology from getting into the wrong hands." The U.S. still bans the sale to China of the most advanced chips, which are necessary for developing artificial intelligence. Both countries aim to lead in the artificial intelligence race. The Trump administration in April blocked the sales of H20 chips, which Nvidia developed to specifically comply with U.S. restrictions for exports of AI chips to China. After the ban was lifted, Nvidia expected to sell hundreds of thousands more H20 chips in the Chinese market. But the easing of the ban has raised eyebrows on Capitol Hill. On Monday, a group of top Democratic senators, including Minority Leader Sen. Chuck Schumer, wrote to Commerce Secretary Howard Lutnick to express their "grave concerns". While chips like the H20 have differing capabilities than the most advanced chips such as Nvidia's H100, "they give (China) capabilities that its domestically-developed chipsets cannot," the senators wrote. Shortly after the ban was lifted, Rep. John Moolenaar, R.-Michigan, who chairs the House Select Committee on China, objected. "The Commerce Department made the right call in banning the H20. Now it must hold the line," Moolenaar wrote in a letter to Lutnick. "We can't let the CCP use American chips to train AI models that will power its military, censor its people, and undercut American innovation," Moolenaar wrote, referring to the Chinese Communist Party by its acronym.
[43]
Nvidia Orders 300,000 AI Chips as Sales Expected to Resume in China
The order is for Nvidia's H20 chips, a less-powerful AI chip tailored to meet U.S. export restrictions. Sales of the H20 in China were effectively banned earlier this year when the Trump administration instituted licensing requirements, but President Donald Trump seemed to reverse course following a recent meeting with Nvidia CEO Jensen Huang. "The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon," the chipmaker said on July 14. Nvidia's significant TSMC order adds to the company's existing H20 stockpile of 600,000 to 700,000 chips, the report said. Sources familiar with the matter reportedly said strong Chinese demand for the chips led Nvidia to make the additional order. An Nvidia spokesperson declined to comment to Investopedia. TSMC did not immediately respond. Shares of Nvidia were little changed shortly after the opening bell Tuesday but have increased in value by nearly a third in 2025.
[44]
Nvidia says its chips have no 'backdoors' after China flags H20 security concerns - The Economic Times
The regulator said it had summoned Nvidia to a meeting on Thursday to explain whether its H20 AI chip had any backdoor security risks, as it was worried that Chinese user data and privacy rights could be affected. Nvidia said on Thursday its products have no "backdoors" that would allow remote access or control after China raised concerns over potential security risks in the firm's H20 artificial intelligence chip. The Cyberspace Administration of China, the country's internet regulator, said it was concerned by a US proposal for advanced chips sold abroad to be equipped with tracking and positioning functions. The CAC's move cast uncertainty over the US company's sales prospects in China weeks after a US export ban was reversed. The regulator said it had summoned Nvidia to a meeting on Thursday to explain whether its H20 AI chip had any backdoor security risks, as it was worried that Chinese user data and privacy rights could be affected. A backdoor risk refers to a hidden method of bypassing normal authentication or security controls. In a statement, an Nvidia spokesperson said, "Cybersecurity is critically important to us. Nvidia does not have 'backdoors' in our chips that would give anyone a remote way to access or control them." The White House and both houses of US Congress have proposed the idea of requiring U.S. chip firms to include location verification technology with their chips to prevent them from being diverted to countries where U.S. export laws ban sales. The separate bills and White House recommendation have not become a formal rule, and no technical requirements have been established. Nvidia has been a focus of US-China relations, and China's move comes shortly after the US this month reversed an April ban on Nvidia selling the H20 chip to China. The company developed the H20 chip for the Chinese market after the US imposed export restrictions on advanced AI chips in late 2023. "Nvidia chips are now dispensable for China. They can be easily put on the negotiating table," said Tilly Zhang, an analyst with Gavekal Dragonomics. "China obviously has more courage and domestic substitution capabilities compared to previous years to not rely on overseas technology." This month, Nvidia CEO Jensen Huang embarked on a public and effusive visit to China, where he sought to demonstrate his commitment to the Chinese market, met with government officials, and praised the country's AI advances. The CAC statement did not elaborate on what backdoor security risks there could be or say what the Chinese government was considering doing as a result. Strong demand Charlie Chai, an analyst with tech- and consumer-focused 86Research, said Beijing's warning was likely a symbolic stance against similar objections made by US authorities. "However, we do not believe Beijing will make excessively harsh demands or introduce regulatory hurdles that will effectively drive Nvidia out of China, for the lack of alternatives. China still needs Nvidia chips for domestic research and applications," Chai said. Nvidia's products are highly sought after not just by Chinese tech companies but also by Chinese military bodies, state-run AI research institutes, and universities. The company last week placed an order with contract manufacturer TSMC for 300,000 H20 chipsets due to strong demand, Reuters reported. Chinese authorities and industry associations have in the past accused U.S. tech companies of posing security risks, with varying consequences. In early 2023, China barred key operators of the country's infrastructure from purchasing from Micron, saying that a review it conducted had found the U.S. memory chipmaker's products posed serious security risks. Last year, the Cybersecurity Association of China, an industry group, called for Intel products sold in China to be subject to a security review, but Chinese regulators have not publicly responded. Nvidia is also facing an antitrust investigation in China. The State Administration for Market Regulation announced late last year it was investigating the chipmaker over suspected violations of the country's anti-monopoly law. The regulator said Nvidia was also suspected of violating commitments it made during its acquisition of Israeli chip designer Mellanox Technologies, under terms outlined in the regulator's 2020 conditional approval of that deal.
[45]
China to ban Nvidia over H20 chips safety risks? Here are latest updates
Trump administration in April blocked the sales of H20 chips, which Nvidia developed to specifically comply with U.S. restrictions for exports of AI chips to China. China's cyberspace regulators on Thursday summoned Nvidia over security concerns that its H20 chips can be tracked and turned off remotely, the Cyberspace Administration of China said on its website. In the meeting, Chinese regulators demanded that the U.S. chip company provide explanations on "backdoor safety risks" of its H20 chips to be sold in China and submit relevant materials, the office said. "Cybersecurity is critically important to us. NVIDIA does not have 'backdoors' in our chips that would give anyone a remote way to access or control them," an Nvidia spokesperson said in a statement to AP. It came just about two weeks after the Trump administration lifted the block on the computing chips and allowed Nvidia to resume sales of H20 chips to the Chinese market. Jensen Huang, chief executive of Nvidia, made the announcement with fanfare when he was in Beijing earlier this month. The latest episode appears to be another turbulence in the tech rivalry between the United States and China, which have left businesses in both countries tussling with governments over market access and national security concerns. Any safety concern by Beijing could jeopardize the sale of H20 chips in China. Citing unnamed U.S. AI experts, the Chinese regulators said Nvidia has developed mature technology to track, locate and remotely disable its computing chips. The regulators summoned Nvidia to "safeguard the cybersecurity and data security of Chinese users," in accordance with Chinese laws, the statement said. The statement also referred to a call by U.S. lawmakers to require tracking and locating capabilities on U.S. advanced chips sold overseas. In May, Rep. Bill Huizenga, R.-Michigan, and Rep. Bill Foster, D.-Illinois, introduced the Chip Security Act that would require high-end chips to be equipped with "security mechanisms" to detect "smuggling or exploitation." The bill has not moved through Congress since its introduction. Foster, a trained physicist, then said, "I know that we have the technical tools to prevent powerful AI technology from getting into the wrong hands." The U.S. still bans the sale to China of the most advanced chips, which are necessary for developing artificial intelligence. Both countries aim to lead in the artificial intelligence race. The Trump administration in April blocked the sales of H20 chips, which Nvidia developed to specifically comply with U.S. restrictions for exports of AI chips to China. But the easing of the ban has raised eyebrows on Capitol Hill. On Monday, a group of top Democratic senators, including Minority Leader Sen. Chuck Schumer, wrote to Commerce Secretary Howard Lutnick to express their "grave concerns". While chips like the H20 have differing capabilities than the most advanced chips such as Nvidia's H100, "they give (China) capabilities that its domestically-developed chipsets cannot," the senators wrote. Shortly after the ban was lifted, Rep. John Moolenaar, R.-Michigan, who chairs the House Select Committee on China, objected. "The Commerce Department made the right call in banning the H20. Now it must hold the line," Moolenaar wrote in a letter to Lutnick. "We can't let the CCP use American chips to train AI models that will power its military, censor its people, and undercut American innovation," Moolenaar wrote, referring to the Chinese Communist Party by its acronym. Q1. What is status on Nvidia H20 Chips? A1. The U.S. still bans the sale to China of the most advanced chips, which are necessary for developing artificial intelligence. Both countries aim to lead in the artificial intelligence race. The Trump administration in April blocked the sales of H20 chips, which Nvidia developed to specifically comply with U.S. restrictions for exports of AI chips to China. But the easing of the ban has raised eyebrows on Capitol Hill. On Monday, a group of top Democratic senators, including Minority Leader Sen. Chuck Schumer, wrote to Commerce Secretary Howard Lutnick to express their "grave concerns". Q2. What is comparison between H20 and H100? A2. Chips like the H20 have differing capabilities than the most advanced chips such as Nvidia's H100.
[46]
Nvidia AI chips worth $1 billion entered China despite US curbs: FT - The Economic Times
These Nvidia AI chips were reportedly smuggled to China in the three months following tighter US export controls, including high-end B200 processors banned in China, Financial Times reported. Nvidia stated that using smuggled products available on the Chinese black market for data centres is technically and financially inefficient.Nvidia's advanced artificial intelligence chips worth at least $1 billion were smuggled to China in the three months after Washington tightened chip export controls, the Financial Times reported on Thursday. The AI chip designer's high-end B200 processors, banned for sale in China, is widely available on a thriving Chinese black market for U.S. chips, the report said, citing sales contracts, company filings and multiple people with direct knowledge of the deals. Nvidia told Reuters that building data centres with smuggled products is inefficient both technically and financially, as the company only offers service and support for authorised products. The U.S. Department of Commerce, White House and Thai government did not immediately respond to requests for comment. Reuters could not independently verify the FT report. In May, multiple Chinese distributors started selling B200s to suppliers of data centres that serve Chinese AI groups, according to the report. The U.S. and China are battling for global dominance in AI and other cutting-edge technologies, triggering a tightrope walk for companies such as Nvidia between the world's two largest economies. Nvidia last week said it would be allowed to resume sales to China after the Trump administration reversed an export restriction on the sales of chips such as H20. The curbs were imposed in April. In the three months before that, Chinese distributors from Guangdong, Zhejiang and Anhui provinces sold Nvidia's B200s, as well as other restricted processors such as the H100 and H200, according to the report. Southeast Asian countries have become markets where Chinese groups obtained restricted chips, the report said, citing industry experts. The U.S. Commerce Department is discussing adding more export controls on advanced AI products to countries such as Thailand as soon as September, the report said.
[47]
Nvidia orders 300,000 H20 chips from TSMC due to robust China demand, sources say - The Economic Times
Nvidia has ordered 300,000 H20 chips from TSMC, responding to strong Chinese demand after a US ban was eased. The H20, made for China, is less powerful than other models. Nvidia seeks export licences and is collecting new orders, as pressure mounts in the US-China tech and trade tensions.Nvidia placed orders for 300,000 H20 chipsets with contract manufacturer TSMC last week, two sources said, with one of them adding that strong Chinese demand had led the US firm to change its mind about just relying on its existing stockpile. The Trump administration this month allowed Nvidia to resume sales of H20 graphics processing units (GPUs) to China, reversing an effective ban imposed in April designed to keep advanced AI chips out of Chinese hands due to national security concerns. Nvidia developed the H20 specifically for the Chinese market after US export restrictions on its other AI chipsets were imposed in late 2023. The H20 does not have as much computing power as Nvidia's H100 or its new Blackwell series sold in markets outside China. The new orders with Taiwan's TMSC would add to existing inventory of 600,000 to 700,000 H20 chips, according to the sources who were not authorised to speak to media and declined to be identified. For comparison purposes, Nvidia sold around 1 million H20 chips in 2024, according to US research firm SemiAnalysis. Nvidia CEO Jensen Huang said during a trip to Beijing this month that the level of H20 orders it received would determine whether production would begin again, adding that any restart to the supply chain would take nine months. The Information reported after Huang's trip that Nvidia had told customers it had limited H20 stocks available and it had no immediate plans to restart wafer production for the GPU. Nvidia needs to obtain export licenses from the US government to ship the H20 chips. It said in mid-July it had been assured by authorities that it would get them soon. The US Department of Commerce has yet to approve those licenses, one of the sources and a third source said. Nvidia on Monday declined to comment on the new orders or the status of its license applications. TSMC declined to comment. The US Commerce Department did not immediately respond to a request for comment. Nvidia has asked Chinese companies interested in purchasing Nvidia H20 chips to submit new documentation including order volume forecasts from clients, said one of the sources and a fourth source. Key product in US-Sino trade war The Trump administration said the resumption of H20 sales was part of negotiations with China over rare earth magnets - elements essential for many industries and which Beijing had limited exports of as trade war tensions escalated. The decision drew bipartisan condemnation from US legislators who are worried that giving China access to the H20 will impede US efforts to maintain its lead in AI technology. But Nvidia and others argue that it is important to retain Chinese interest in its chips - which work with Nvidia's software tools - so that developers do not completely switch over to offerings from rivals like Huawei. Before the April ban, Chinese technology giants including Tencent, ByteDance and Alibaba substantially increased H20 orders as they deployed DeepSeek's cost-effective AI models as well as their own models. The popularity of Nvidia products in China, despite the advent of rival, albeit less powerful, offerings from Huawei, has been underscored by a boom in repair demand for its other banned GPUS - many of which have been smuggled into the country. After the April ban on H20 sales, Nvidia warned that it would have to write off $5.5 billion in inventories, while Huang told the Stratechery podcast that the company also had to forgo $15 billion in potential sales.
[48]
China summons Nvidia over alleged security risk in H20 AI chips
China questioned Nvidia about security concerns with its H20 AI chips. The Cyberspace Administration of China cited location tracking and remote shutdown risks. This follows improved trade talks between the US and China. The H20 chip, once banned, was recently cleared for sale. US lawmakers worry about China's AI and military advancements. Chinese authorities summoned Nvidia Corp. representatives to discuss alleged security risks related to its H20 artificial intelligence chips. The Cyberspace Administration of China said in a statement on Thursday that the chips had a serious security vulnerability and asked Nvidia staff to explain the risks and provide relevant documents. At issue are location tracking and remote shutdown capabilities of the products, according to the statement. Nvidia, which hasn't publicly acknowledged that the H20 chips have such functions, didn't immediately respond to a request for comment outside of regular business hours. The move marked an abrupt change in tone after an apparent improvement in trade relations between the US and China, coming just days after a Stockholm summit between the two nations' trade officials. The particular H20 product, which had in April been banned from sale to China by the Trump administration, had only recently been cleared to return to the market by US authorities. Nvidia and Advanced Micro Devices Inc. said this month they would resume sales of some AI chips in China after securing Washington's assurances that such shipments would get approved. US lawmakers slammed the resumption over risks that it would boost Beijing's military capabilities and expand its ability to compete with the US in AI. Administration officials responded by saying China already had more capable products than the H20 from domestic providers like Huawei Technologies Co. The less-advanced H20 chip was designed to comply with Washington's earlier trade curbs on China.
[49]
Nvidia's AI Chips Worth $1 Billion Flood China's Black Market After Trump's Export Restrictions: 'It's Like A Seafood Market' - NVIDIA (NASDAQ:NVDA)
Nvidia Corp.'s NVDA advanced AI processors worth over $1 billion were reportedly smuggled to China after the U.S. government's efforts to restrict chip exports. What Happened: The shipments took place within three months of President Donald Trump's tightened export controls. The B200, a chip widely used by U.S. tech giants for their AI systems, was the most sought-after chip in China's black market for American semiconductors, according to a report by the Financial Times on Thursday. Check out the current price of NVDA stock here. Chinese distributors began selling the B200 to data center suppliers serving Chinese AI groups soon after the Trump administration restricted the sale of the H20, a less-powerful Nvidia chip designed to comply with the regulations under former President Joe Biden. Distributors in China's Guangdong, Zhejiang, and Anhui provinces sold Nvidia's B200 chips along with other restricted processors like the H100 and H200. Total sales during this period are estimated to have exceeded $1 billion. Although it's legal to import and sell restricted Nvidia chips within China if the appropriate border tariffs are paid, entities that sell and ship them to China would be violating U.S. regulations. On social media, groups are formed to connect hundreds of traders with data center suppliers, aligning supply with demand. One distributor told the publication, "It's like a seafood market...There's no shortage." Nvidia has consistently maintained that there is "no evidence of any AI chip diversion". The company also said it is unaware of any of its restricted products being sold to China. SEE ALSO: Tucker Carlson's Milton Interview Sparks Outrage: Bill Ackman Backs Hindenburg Founder Against Former Nikola CEO, Calls Him 'Convicted Corporate Stock Market Fraudster' - Invesco QQQ Trust, Series 1 ( Why It Matters: The smuggling of Nvidia's AI chips to China comes amid the U.S. government's efforts to curb semiconductor smuggling into China. In early July, the U.S. government considered imposing restrictions on the export of AI chips, including those produced by Nvidia, to Malaysia and Thailand to prevent China from acquiring these components through intermediaries in these countries. Despite these efforts, the smuggling of Nvidia's chips to China continued, highlighting the challenges faced by the U.S. in controlling the flow of advanced technology to China. Last week, Nvidia CEO Jensen Huang revealed that the Trump administration would resume allowing the sale of the company's China-specific H20 chip. The news also follows Huang's recent high-profile visit to China, where he was hailed as a rockstar and received a warm reception. Huang's visit was seen as a sign of Nvidia's commitment to the Chinese market despite ongoing trade tensions between the U.S. and China. Benzinga's Edge Rankings place Nvidia in the 85th percentile for momentum and the 99th percentile for growth, reflecting its strong performance in both areas. Check the detailed report here. READ MORE: As Elon Musk, Mark Zuckerberg And Sam Altman Chase Nvidia AI Chips, Jensen Huang Says 'Just Call Me' -- Here's How Allocation Really Works Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. NVDANVIDIA Corp$172.270.87%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum85.14Growth98.69QualityN/AValue6.52Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs
[50]
NVIDIA's GB200 "AI Servers" Are Reportedly Being Smuggled Into China, Even After Jensen Claimed They Weigh "Two Tons" and Can't End Up There
NVIDIA's high-end AI servers are unexpectedly ending up in China, showing that the flow of AI chips to the nation is consistent through several methods. The Trump administration has been concerned about US AI chips ending up in China through "shady means", and they are working towards regulating the flow, but even after the recent export controls, NVIDIA's AI equipment is consistently available in Chinese black markets. Based on a report by Financial Times, it is claimed that AI products worth at least $1 billion have ended up in China's AI markets ever since the US administration imposed the export controls, and even as large systems as GB200 AI servers are available in China. FT managed to take a look at several sales contracts and filings, and it was revealed that Chinese AI markets are most interested in NVIDIA's B200-powered systems, and interestingly, they are readily available in local markets. After the H20 AI accelerator was initially banned, many distributors managed to get their hands on the B200 AI system through several means, either by trade loopholes or grey channels that are yet to be patched out by the US government. Several Chinese provinces, notably Anhui, reportedly have a massive inventory of NVIDIA AI chips, which includes B200, H100, and H200. Interestingly, many Chinese companies allegedly accessing NVIDIA's chips through distributors have centres in regions like Singapore, and a large portion of these AI systems are labelled under Supermicro (SMCI) packaging. AI systems are available on several Chinese retail platforms, and many of the sellers are even showing live tests of these racks to show the legitimacy of these systems. Undoubtedly, China has high-end AI compute being sold readily on such platforms, indicating that the export controls haven't managed to thwart the flow of chips completely. Individuals are also selling the GB200 AI systems, which are one of NVIDIA's most sought-after platforms globally. While the FT couldn't verify the presence of the cluster in China's markets, many vendors are publicly confirming the availability of Grace Blackwell systems. However, an important point to note is that the volume of the AI equipment sold is negligible relative to the massive AI clusters being built globally, but the hardware is enough to cater to demands from low-to-mid Chinese CSPs. It would be interesting to see how the US responds to such claims, given that their "AI action" plans deals towards patching the flow of equipment to China by any means possible.
[51]
Chinese Repair Shops Quietly Keep Smuggled Nvidia AI Chips Alive, Fixing Up To 500 Banned H100 GPUs Per Month As US Scrambles To Track Them: Report - NVIDIA (NASDAQ:NVDA)
A booming underground repair industry in China is breathing new life into banned Nvidia Corp. NVDA AI chips, raising alarms in Washington over enforcement gaps and national security risks. What Happened: Despite a U.S. export ban on Nvidia's advanced H100 and A100 graphics processing units (GPUs), Chinese tech firms are repairing hundreds of the restricted chips each month, reported Reuters on Thursday. Two repair companies in Shenzhen confirmed they service up to 500 Nvidia AI chips monthly, including H100s that were never legally sold in China, the report said. "There is really significant repair demand," said a co-owner of one repair firm, who recently created a new company to handle the AI chip influx. Their facilities include server rooms replicating data center environments to test the repaired chips. See Also: Elon Musk, Richest Man Alive, Is Asked How He Feels About Being Labeled 'Evil Billionaire' -- 'It's Not Like I've Got Some Massive Cash Balance' These GPUs, prized for AI training, are believed to have entered the country through large-scale smuggling, with evidence suggesting use by Chinese government and military entities. The U.S. has banned sales of these chips to China since 2022 to curtail its AI and defense advancements. Nvidia said only it and its authorized partners are allowed to service its hardware. "Using restricted products without approved hardware, software, and technical support is a nonstarter," a company spokesperson told the publication. Why It Matters: Earlier in the day, it was reported that over $1 billion worth of Nvidia's advanced AI chips, including the sought-after B200, were reportedly smuggled into China despite U.S. export restrictions. Last week, Nvidia CEO Jensen Huang announced that the Donald Trump administration would once again permit the sale of the company's H20 chip, which is specifically designed for the Chinese market. This development came shortly after Huang's widely publicized visit to China, where he was welcomed like a rock star and received an enthusiastic reception. Last month, Nvidia revised its financial strategy after U.S. export restrictions halted AI chip sales to China, leading to a $2.5 billion revenue loss in the first quarter of 2025. At the time, Huang said the company will no longer include China in future revenue or profit forecasts, calling any potential sales there a "bonus." Price Action: Nvidia shares rose 1.73% on Thursday, closing at $173.74 during regular trading hours. However, in Friday's pre-market session, the stock was down 0.14% at the time of writing, according to Benzinga Pro. Benzinga's Edge Stock Rankings indicate that Nvidia continues to demonstrate strong upward momentum across short, medium and long-term timeframes. Additional performance insights can be found here. Read Next: Ethereum Treasury Company Trend 'Will Accelerate', Says Bitwise's Matt Hougan -- Here's What It Means For ETH's Price Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: gguy via Shutterstock NVDANVIDIA Corp$173.23-0.29%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum86.89Growth98.70QualityN/AValue6.42Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs
[52]
China's "GPU Repair" Business Is Booming Right Now As The Illegally Acquired NVIDIA H100 & A100 AI Chips Are Being Repaired In Shocking Numbers
Apart from the "smuggling business" in China, it seems like repairers are earning hefty sum of money by providing services for NVIDIA's high-end AI chips. There's no doubt that China has access to high-end AI chips from around the globe, and more importantly, they have been used by domestic firms for several years now. However, with such a large usage span, the need for repairing chips has risen tremendously. Chinese firms have capitalized on this by offering plenty of services and bringing several H100 and A100 AI chips to the repairers. A report by Reuters claims that one of the firms handles repairs for more than 500 chips per month, and there are a dozen or more such repair shops out there. The repair industry has seen massive growth in the past few months, which indicates that there has been a continuous flow of AI chips to China, despite US export controls. More importantly, since NVIDIA doesn't provide support for GPUs such as the H100 and A100 to Chinese customers anymore, repairers have capitalized on this to offer services in wide demand. And given that some of the older chips in China have been functional for more than three years, servicing them is seen as a better option compared to getting new ones from NVIDIA or even Huawei. It is claimed that repairers charge up to $2,800 to fix an AI chip. The services generally include software testing, fan repair, PCB fixing, and replacement of broken parts. The question is how these repairers manage to get the components, but considering that the repair business is at its peak right now, there is a dedicated supply chain for it as well. The repairers are ensuring that the lifecycle of these chips increases by a few months to years, and that way, China would still have access to high-end AI chips.
[53]
Jefferies: NVIDIA Likely Has Between 600,000 And 900,000 H20 GPUs In Inventory, While Chinese Demand Is Around 1.8 Million Units
This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Although the US has backed off from its more stringent export controls on NVIDIA's China-specific H20 GPUs, allegedly as part of a broader give-and-take to resolve reciprocal Chinese export restrictions on rare earth magnets, this de-escalation can't fulfill China's ravenous appetite for AI GPUs, not by a long shot. For the benefit of those who might not be aware, the Trump administration had imposed stringent export licensing requirements on NVIDIA's China-focused H20 chips back in April 2025, prompting the GPU manufacturer to write off its inventory worth billions of dollars. However, after weeks of public exhortations by its CEO Jensen Huang, where he emphatically argued in favor of re-deploying the American technology stack in China, NVIDIA published a blog post a few days back, announcing the imminent filing of an application with the US government to resume the sale of its China-specific H20 GPUs. NVIDIA notably claimed that it has received assurances from US officials that it will receive the requisite authorizations promptly, allowing it to resume H20 shipments to China. This brings us to the crux of the matter. Jefferies has now estimated that NVIDIA currently has between 600,000 and 900,000 units of its H20 GPU in inventory, while the demand from China for these AI-critical chips currently persists at around 1.8 million units. Jefferies also believes that NVIDIA shipped around 300,000 units of the H20 GPU to China in the first quarter of 2025 - a shipment volume that was largely in line with NVIDIA's delivery cadence in the pre-ban period. Despite growing friction and bottlenecks, Jefferies analysts believe that Chinese firms continue to prefer NVIDIA's offerings due to the CUDA ecosystem, superior cluster performance of those chips, and the limited availability of comparable domestic offerings, including Huawei's 910C GPUs. Of course, the yawning demand-supply gap for H20 GPUs in China is likely to be filled by NVIDIA's upcoming B30 chips, which will start getting shipped to China in the fourth quarter of 2025, albeit with "reduced memory specs to comply with a likely new criterion for AI chip export control." As such, Jefferies has now raised its China-specific AI CapEx estimate for the ongoing year by 40 percent to $108 billion, while hiking its CapEX estimate for 2025-2030 by 28 percent to $806 billion. Meanwhile, the US is currently facing its own supply shortfall for domestically manufactured chips, with the US Treasury Secretary Scott Bessent recently declaring that TSMC Arizona handles just 7 percent of the overall demand from US companies, with "overregulation" continuing to act as a critical dampener for ramping up the domestic manufacturing of chips.
[54]
Booming NVIDIA AI GPU Repair Shops In China Charge As Much As $2,400 Apiece
This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. According to a fresh report from Reuters, repair shops are a booming business in China as US sanctions constrain the number of NVIDIA GPUs available. NVIDIA's GPUs became one of the most hotly demanded commodities in China after the latest round of sanctions, and with the firm continuing to struggle with supplies and production ramps after securing leeway from the Trump administration, Chinese GPU users are eager to squeeze every bit of performance that they can from their chips. US sanctions on NVIDIA's GPUs have forced Chinese companies to squeeze out every minute of performance from their existing inventories. As a result, the failure rates of these chips are high, leading to repair shops springing up to cater primarily to the repair of older H100 and A100 GPUs. Reuters' sources believe that even though the Trump administration has recently relaxed NVIDIA H20 GPU exports to China, Chinese firms are likely to prefer H100 and A100 chips due to their training capabilities. AI development requires software engineers to train the software on existing data sets, and once the training is complete, the AI 'infers' responses to user queries. While the NVIDIA H100 was banned for sale in China even before it was launched, the fact that repair shops have sprung up for the chip suggests that the chips have been smuggled into China despite the US restrictions. The repair shops are charging up to $2,400 apiece to repair the GPUs, with some having the capacity to work on 500 chips a month. NVIDIA's warranty policies typically cover failed products, but the US restrictions on China mean that the firm is unable to provide these services in the country. The US firm's chips are in high demand in China because local companies, primarily Huawei, cannot come up with equivalent or superior alternatives. This inability has played a central role in CEO Jensen Huang's successful effort to convince the Trump administration to remove restrictions on chips headed for Chinese use. Huang argues that depriving China of NVIDIA's GPUs creates the risk of the US ceding a key role in the global AI hardware ecosystem. Chinese firms also prefer to use the H100 over the H20 due to the former's utility in enabling AI development. Additionally, the demand for the H20 GPUs outstrips NVIDIA's inventory, which isn't expected to stabilize soon, given that the production lines for the GPUs have been repurposed for other chips. Investment bank Jefferies believes that while NVIDIA's H20 inventory could sit at 900,000 units at the very best, the demand of the GPUs in China is 1.8 million units which not only places significant pressure on NVIDIA but also allows it to charge higher prices to increase its capacity.
[55]
Nvidia Orders Another 300,000 H20 Chips From TSMC As Soaring China Demand Reverses US Export Setback: Report - Alibaba Gr Hldgs (NYSE:BABA), NVIDIA (NASDAQ:NVDA)
Nvidia Corporation NVDA has reportedly ordered 300,000 additional H20 AI chips from Taiwan Semiconductor Manufacturing Co. TSM due to unexpectedly strong demand in China. What Happened: Nvidia placed the new order with TSMC last week, signaling a significant reversal in its production plans for the H20 GPU, reported Reuters, citing two sources. The move follows the Donald Trump administration's decision to ease restrictions on H20 exports to China, which were initially imposed in April amid national security concerns. Nvidia initially halted production of the chip and told customers it had limited inventory. See Also: Elon Musk Confirms Tesla As the Mystery Big-Tech That Signed $16.5 Billion Chip Contract With Samsung: 'I Will The Line Personally' To Boost Progress Jensen Huang had said any production restart would require strong demand and at least nine months to reactivate the supply chain. The new orders will supplement Nvidia's existing stockpile of 600,000-700,000 H20 chips, the report added, citing the unnamed sources. Why It's Important: The H20 is a customized AI chip designed to comply with U.S. export controls and serve Nvidia's Chinese clients without violating trade regulations. Although less powerful than the company's flagship H100 or Blackwell chips, the H20 has been widely adopted by major Chinese tech firms, including Tencent Holdings ADR TCEHY, Alibaba Group BABA and ByteDance. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started While some U.S. lawmakers have criticized the resumption of chip exports, Nvidia argues that continued engagement with China helps prevent developers from switching to domestic alternatives like Huawei Technologies. The U.S. Department of Commerce has yet to issue final export licenses for the H20, but Nvidia has reportedly been assured they are forthcoming. In the meantime, the company has requested updated order forecasts from Chinese customers, the report said. Meanwhile, last week, it was reported that over $1 billion worth of Nvidia's advanced AI processors were reportedly smuggled into China, bypassing U.S. government export restrictions. Price Action: On Monday, Nvidia shares rose 1.87% during regular trading and inched up another 0.23% after hours, closing at $177.15, according to Benzinga Pro. Benzinga's Edge Stock Rankings indicate that NVDA continues to exhibit strong momentum across short, medium and long-term timeframes. However, despite its solid performance, the stock's value score remains comparatively low. More detailed performance insights are available here. Read Next: Trump's New EU Trade Deal Labeled 'Bad News' By Economists As Dow Futures Spike Over 150 Points Photo: Hepha1st0s On Shutterstock.com Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. BABAAlibaba Group Holding Ltd$122.482.04%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum90.29Growth94.74Quality46.49Value84.53Price TrendShortMediumLongOverviewNVDANVIDIA Corp$177.152.10%TCEHYTencent Holdings Ltd$70.12-0.09%TSMTaiwan Semiconductor Manufacturing Co Ltd$242.70-1.18%Market News and Data brought to you by Benzinga APIs
[56]
NVIDIA Reportedly Places New H20 AI GPU Orders at TSMC, Signaling Efforts to Reignite China Revenue Stream After Several Months
Despite rumors of NVIDIA halting the production of H20 AI chips, it seems like new orders have been placed at TSMC, amid the strong demand coming from Chinese customers. NVIDIA seems to have gotten the "green signal" to sell chips in China and, more importantly, to re-open a vital revenue stream. The company recent announced that the Trump administration has lifted the chip export controls on China, which would open up H20 shipments to China. However, there was skepticism in the markets on whether Team Green would produce new H20 chips, considering supply chain complexities, but according to a report by Reuters, NVIDIA is looking to get new inventory on hands for Chinese AI customers. It is now claimed that NVIDIA has placed an order for 300,000 units of the H20 AI chip at TSMC, and the order will be redirected towards the massive demand Team Green currently sees in China. It is estimated that with these orders, the company's total H20 inventory would come around 600,000 to 700,000 H20 chips, which, based on what we know, would be sufficient for at least two or three quarters of NVIDIA's business in the region. For now, it appears that Team Green is conducting a "market survey" to develop order volume forecasts for its H20 AI chip, given that this solution has been offered to the domestic markets for several quarters now. And since computing demand is rising massively, Beijing would need more capable solutions, and that's where NVIDIA will likely target next, as, according to our estimates, we anticipate new "Blackwell-based" B20 AI chip, and GeForce RTX 6000D GPUs to be released in China by year-end, or the first quarter of 2026, depending upon the US's ease in export controls. The NVIDIA China story is still ongoing, and it seems like Jensen cannot stay out of the domestic market for too long, and with that motive, he has managed to change the stance of the Trump administration, which is now determined to populate China with American AI products.
[57]
Why Did USA Allow Nvidia Shipping H20 AI Chips To China - NVIDIA (NASDAQ:NVDA)
Nvidia NVDA has filed applications with the U.S. government to resume shipments of its H20 AI chips to China and expects to receive the necessary licenses soon. Citing Nvidia's move, Reuters reported on Wednesday that White House National Economic Adviser Kevin Hassett indicated the decision by President Donald Trump and his team to allow the chips to be exported was aimed at preventing China from gaining a technological edge in the race to develop advanced semiconductors. The H20 chips represent the most powerful AI hardware Nvidia can legally offer in China, Reuters cited Hassett's statement to the Fox News Channel. Also Read: AI Momentum Powers Nvidia, Arm And Chip Supply Chain In BofA Recap However, these chips come with reduced computing capabilities compared to international versions, due to export restrictions first implemented during Trump's presidency and later reinforced by former President Joe Biden. Hassett suggested that the administration weighed the risk of China accelerating its domestic chip innovation if U.S. companies were barred from selling to the Chinese market. By permitting the shipments, the administration aimed to preserve America's lead in the global AI chip competition, Reuters noted. The Financial Times also reported that the U.S. temporarily lifted certain technology export restrictions on China to maintain momentum in trade negotiations and support President Trump's efforts to secure a meeting with Chinese President Xi Jinping. Meanwhile, Nvidia reportedly adjusted its production strategy by placing a fresh order for 300,000 H20 AI chips with its primary manufacturing partner, Taiwan Semiconductor Manufacturing Co TSM, last week, a significant ramp-up in output for the H20 GPU. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Nvidia stock surged 31% year-to-date, gaining over 61% in the last three months as Big Tech giants aggressively upgrade their chip capabilities to meet the global demand for artificial intelligence and consolidate their positions. On May 28, Nvidia posted strong first-quarter results, reporting revenue of $44.1 billion, up 69% year-over-year and ahead of the $43.2 billion Street estimate. Earnings reached 81 cents per share, though excluding a $4.5 billion charge tied to excess H20 chip inventory and China-related purchase obligations, adjusted EPS would have been 96 cents, topping varied analyst expectations. Nvidia's Data Center segment led the way with $39.1 billion in revenue, up 73% year-over-year. Gaming and AI PC revenue surged 42% to $3.8 billion, partly fueled by plans to power the upcoming Nintendo NTDOY Switch 2. The company acknowledged the April 9 export ban on H20 AI chips to China had a significant impact, with $4.6 billion in H20 sales booked before the licensing rules changed. Looking ahead, Nvidia expects a second-quarter revenue of $45.0 billion, plus or minus 2%, factoring in an $8.0 billion hit from China's export controls. CEO Jensen Huang emphasized surging global demand for Nvidia's AI platforms, calling its Blackwell NVL72 supercomputer a game-changer amid rising adoption of AI infrastructure worldwide. NVDA Price Action: NVDA stock is trading higher by 0.48% to $176.35 premarket at last check Wednesday. Read Next: ON Semiconductor Jumps After Nvidia Deal -- Is This The Next Big AI Power Play? Image via Shutterstock NVDANVIDIA Corp$176.370.49%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum91.68Growth98.76QualityN/AValue6.15Price TrendShortMediumLongOverviewNTDOYNintendo Co Ltd$21.50-0.32%TSMTaiwan Semiconductor Manufacturing Co Ltd$242.000.28%Market News and Data brought to you by Benzinga APIs
[58]
Why The US Is Letting Nvidia Ship H20 AI Chips To China - NVIDIA (NASDAQ:NVDA)
Nvidia NVDA has filed applications with the U.S. government to resume shipments of its H20 AI chips to China and expects to receive the necessary licenses soon. Citing Nvidia's move, Reuters reported on Wednesday that White House National Economic Adviser Kevin Hassett indicated the decision by President Donald Trump and his team to allow the chips to be exported was aimed at preventing China from gaining a technological edge in the race to develop advanced semiconductors. The H20 chips represent the most powerful AI hardware Nvidia can legally offer in China, Reuters cited Hassett's statement to the Fox News Channel. Also Read: AI Momentum Powers Nvidia, Arm And Chip Supply Chain In BofA Recap However, these chips come with reduced computing capabilities compared to international versions, due to export restrictions first implemented during Trump's presidency and later reinforced by former President Joe Biden. Hassett suggested that the administration weighed the risk of China accelerating its domestic chip innovation if U.S. companies were barred from selling to the Chinese market. By permitting the shipments, the administration aimed to preserve America's lead in the global AI chip competition, Reuters noted. The Financial Times also reported that the U.S. temporarily lifted certain technology export restrictions on China to maintain momentum in trade negotiations and support President Trump's efforts to secure a meeting with Chinese President Xi Jinping. Meanwhile, Nvidia reportedly adjusted its production strategy by placing a fresh order for 300,000 H20 AI chips with its primary manufacturing partner, Taiwan Semiconductor Manufacturing Co TSM, last week, a significant ramp-up in output for the H20 GPU. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Nvidia stock surged 31% year-to-date, gaining over 61% in the last three months as Big Tech giants aggressively upgrade their chip capabilities to meet the global demand for artificial intelligence and consolidate their positions. On May 28, Nvidia posted strong first-quarter results, reporting revenue of $44.1 billion, up 69% year-over-year and ahead of the $43.2 billion Street estimate. Earnings reached 81 cents per share, though excluding a $4.5 billion charge tied to excess H20 chip inventory and China-related purchase obligations, adjusted EPS would have been 96 cents, topping varied analyst expectations. Nvidia's Data Center segment led the way with $39.1 billion in revenue, up 73% year-over-year. Gaming and AI PC revenue surged 42% to $3.8 billion, partly fueled by plans to power the upcoming Nintendo NTDOY Switch 2. The company acknowledged the April 9 export ban on H20 AI chips to China had a significant impact, with $4.6 billion in H20 sales booked before the licensing rules changed. Looking ahead, Nvidia expects a second-quarter revenue of $45.0 billion, plus or minus 2%, factoring in an $8.0 billion hit from China's export controls. CEO Jensen Huang emphasized surging global demand for Nvidia's AI platforms, calling its Blackwell NVL72 supercomputer a game-changer amid rising adoption of AI infrastructure worldwide. NVDA Price Action: NVDA stock is trading higher by 0.48% to $176.35 premarket at last check Wednesday. Read Next: ON Semiconductor Jumps After Nvidia Deal -- Is This The Next Big AI Power Play? Image via Shutterstock NVDANVIDIA Corp$176.320.46%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum91.68Growth98.76QualityN/AValue6.15Price TrendShortMediumLongOverviewNTDOYNintendo Co Ltd$21.50-0.32%TSMTaiwan Semiconductor Manufacturing Co Ltd$242.300.40%Market News and Data brought to you by Benzinga APIs
[59]
China Reportedly Launches an Investigation into NVIDIA's H20 AI Chips to See Whether They Are Equipped with 'Location Tracking' & Other Backdoors Heading Towards the US
It seems like NVIDIA's ambitions for the Chinese AI markets might face a new hurdle, as a regulatory authority has launched an investigation into the H20 AI chips. After several setbacks and troubles, Team Green managed to see the Trump administration's approval to sell its AI chips in China, notably the H20 accelerator; however, it seems like there's a new hurdle now. According to SCMP, it is reported that the Cyberspace Administration of China (CAC) is investigating NVIDIA's AI chips being sold into the country, and the authority is concerned with security breaches, following the claims that Washington plans to equip AI chips with location tracking and other mechanisms. The CAC has summoned NVIDIA to a meeting on Thursday to explain any potential backdoors involved with the H20 AI chip. Given that the regulatory authority has massive control over the technological flow in China, any backdoor could potentially halt the sales of NVIDIA's AI chips in the country, creating enormous uncertainty. The concern actually comes from a bill introduced by US Senator Tom Cotton, which involved America integrating security measures into NVIDIA's chips being sold to hostile nations, to ensure that they don't fall into the wrong hands. Interestingly, NVIDIA faces massive demand for the H20 AI accelerator from China and, more importantly, has also placed new orders at TSMC, which would bring the total inventory closer to a million units. And since Team Green has done a hefty "diplomacy" to convince the Trump administration to allow them to sell its chips to China, any regulatory barrier placed by Beijing could prove to be fatal for the company's business in the region. For now, the investigation has been launched and there are no signs of difficulties for NVIDIA yet, and since Team Green will rely on its existing H20 inventory for China, a security backdoor through hardware means does seem a bit far-fetched.
[60]
China Questions Nvidia's AI Chip As US Export Controls Stoke Tensions - NVIDIA (NASDAQ:NVDA)
Nvidia Corp. NVDA has come under renewed regulatory pressure in China, just weeks after a U.S. policy reversal opened the door for sales of its H20 artificial intelligence chip to the Chinese market. The Cyberspace Administration of China (CAC), the nation's top internet watchdog, raised concerns over potential security vulnerabilities in the H20 chip, a development that could complicate the chipmaker's expansion plans in the world's second-largest economy. On Thursday, the CAC summoned Nvidia officials for a closed-door meeting, demanding clarity on whether the H20 chip includes backdoor security risks that could threaten national data privacy. Also Read: MicroVision Tech On Nvidia Platform -- What's Going On? According to a Reuters report, Chinese regulators expressed unease over the chip's tracking and positioning features, capabilities reportedly developed in alignment with a U.S. directive designed to monitor chip usage and curb sensitive technology exports. The concerns are linked to legislation introduced by the United States in May, which mandates that AI chips subject to export restrictions be embedded with location-verification mechanisms. The move is part of Washington's broader strategy to prevent advanced U.S. semiconductor technologies from being accessed by China, a critical player in the global chip market. Nvidia specifically designed the H20 chip to comply with prior U.S. export restrictions imposed in late 2023. The chip's rollout was seen as a strategic workaround aimed at maintaining Nvidia's foothold in China amid escalating technological decoupling between the world's two largest economies. However, China's latest inquiry introduces fresh uncertainty into Nvidia's China strategy, just after the U.S. government eased its April ban on exports of the H20 chip to Chinese customers. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started The regulatory heat in China also extends beyond national security concerns. Nvidia is reportedly under investigation by China's State Administration for Market Regulation for potential breaches of the country's anti-monopoly law, including conditions tied to its $6.9 billion acquisition of Mellanox Technologies in 2020. The scrutiny comes against the backdrop of broader U.S.-China tech tensions. As Washington continues to enforce export controls on cutting-edge semiconductor technologies, Beijing has responded with retaliatory measures, including restrictions on U.S. memory chipmaker Micron Technology MU, which counts China as a key market. Despite these headwinds, Nvidia continues to demonstrate unwavering commitment to its Chinese business. CEO Jensen Huang made a high-profile visit to the country earlier this month, underscoring the company's long-term presence in the region. Nvidia reportedly placed an order for 300,000 H20 chipsets last week to fulfill surging demand in China, Reuters said. Investors have largely brushed off geopolitical concerns, with Nvidia stock gaining more than 33% year-to-date amid an unprecedented boom in AI investment by major tech players. On Monday, Nvidia made history by becoming the first publicly traded company to reach a $4.3 trillion market capitalization, closing 1.87% higher at $176.75. The milestone came just two weeks after it crossed the $4 trillion threshold, placing it $500 billion ahead of Microsoft Corp. MSFT, the world's second-most valuable public company. NVDA Price Action: NVDA stock is trading higher by 1.72% to $182.37 premarket at last check Thursday. Read Next: Marvell Stock Rebounds On AI Momentum, New Global Chip Partnership Image via Shutterstock NVDANVIDIA Corp$182.341.71%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum91.48Growth98.81QualityN/AValue6.24Price TrendShortMediumLongOverviewMSFTMicrosoft Corp$555.858.30%MUMicron Technology Inc$116.101.19%Market News and Data brought to you by Benzinga APIs
[61]
Nvidia AI chips worth US$1 billion entered China despite U.S. curbs, FT reports
The AI chip designer's high-end B200 processors, banned for sale in China, is widely available on a thriving Chinese black market for U.S. chips, the report said, citing sales contracts, company filings and multiple people with direct knowledge of the deals. Nvidia told Reuters that building data centres with smuggled products is inefficient both technically and financially, as the company only offers service and support for authorized products. The U.S. Department of Commerce, White House and Thai government did not immediately respond to requests for comment. Reuters could not independently verify the FT report. In May, multiple Chinese distributors started selling B200s to suppliers of data centres that serve Chinese AI groups, according to the report. The U.S. and China are battling for global dominance in AI and other cutting-edge technologies, triggering a tightrope walk for companies such as Nvidia between the world's two largest economies. Nvidia last week said it would be allowed to resume sales to China after the Trump administration reversed an export restriction on the sales of chips such as H20. The curbs were imposed in April. In the three months before that, Chinese distributors from Guangdong, Zhejiang and Anhui provinces sold Nvidia's B200s, as well as other restricted processors such as the H100 and H200, according to the report. Southeast Asian countries have become markets where Chinese groups obtained restricted chips, the report said, citing industry experts. The U.S. Commerce Department is discussing adding more export controls on advanced AI products to countries such as Thailand as soon as September, the report said. ---
[62]
China summons Nvidia over 'backdoor safety risks' in H20 chips
WASHINGTON -- China's cyberspace regulators on Thursday summoned Nvidia over security concerns that its H20 chips can be tracked and turned off remotely, the Cyberspace Administration of China said on its website. In the meeting, Chinese regulators demanded that the U.S. chip company provide explanations on "backdoor safety risks" of its H20 chips to be sold in China and submit relevant materials, the office said. "Cybersecurity is critically important to us. NVIDIA does not have 'backdoors' in our chips that would give anyone a remote way to access or control them," an Nvidia spokesperson said in a statement to AP. It came just about two weeks after the Trump administration lifted the block on the computing chips and allowed Nvidia to resume sales of H20 chips to the Chinese market. Jensen Huang, chief executive of Nvidia, made the announcement with fanfare when he was in Beijing earlier this month. The latest episode appears to be another turbulence in the tech rivalry between the United States and China, which have left businesses in both countries tussling with governments over market access and national security concerns. Any safety concern by Beijing could jeopardize the sale of H20 chips in China. Citing unnamed U.S. AI experts, the Chinese regulators said Nvidia has developed mature technology to track, locate and remotely disable its computing chips. The regulators summoned Nvidia to "safeguard the cybersecurity and data security of Chinese users," in accordance with Chinese laws, the statement said. The statement also referred to a call by U.S. lawmakers to require tracking and locating capabilities on U.S. advanced chips sold overseas. In May, U.S. Rep. Bill Huizenga, R.-Michigan, and U.S. Rep. Bill Foster, D.-Illinois, introduced the Chip Security Act that would require high-end chips to be equipped with "security mechanisms" to detect "smuggling or exploitation." The bill has not moved through U.S. Congress since its introduction. Foster, a trained physicist, then said, "I know that we have the technical tools to prevent powerful AI technology from getting into the wrong hands." The U.S. still bans the sale to China of the most advanced chips, which are necessary for developing artificial intelligence. Both countries aim to lead in the artificial intelligence race. The Trump administration in April blocked the sales of H20 chips, which Nvidia developed to specifically comply with U.S. restrictions for exports of AI chips to China. After the ban was lifted, Nvidia expected to sell hundreds of thousands more H20 chips in the Chinese market. But the easing of the ban has raised eyebrows on Capitol Hill. On Monday, a group of top Democratic senators, including Minority Leader Sen. Chuck Schumer, wrote to Commerce Secretary Howard Lutnick to express their "grave concerns". While chips like the H20 have differing capabilities than the most advanced chips such as Nvidia's H100, "they give (China) capabilities that its domestically-developed chipsets cannot," the senators wrote. Shortly after the ban was lifted, Rep. John Moolenaar, R.-Michigan, who chairs the House Select Committee on China, objected. "The Commerce Department made the right call in banning the H20. Now it must hold the line," Moolenaar wrote in a letter to Lutnick. "We can't let the CCP use American chips to train AI models that will power its military, censor its people, and undercut American innovation," Moolenaar wrote, referring to the Chinese Communist Party by its acronym.
[63]
Nvidia AI chips worth $1B smuggled into China after Trump imposed US...
At least $1 billion in Nvidia computer chips were smuggled into China in the three-months span after President Trump imposed export controls on the cutting-edge chips, according to a bombshell report Thursday. Nvidia's powerful B200 chip - favored by US tech giants like OpenAI and Google to power their artificial intelligence models - are banned for sale to China due to government rules limiting shipments for chips that exceed certain performance thresholds. However, the chip was still being sold in May by Chinese suppliers to data center operators that support China-based tech firms, the Financial Times reported, citing an analysis of sales contracts, company filings and interviews with sources with direct knowledge of the deals. "Export controls will not prevent the most advanced Nvidia products from entering China," a Chinese data center operator told the FT. "What it creates is just inefficiency and huge profits for the risk-taking middle men." In May, the Trump administration had banned Nvidia from selling less-powerful H20 chips that were specifically built by the company to adhere to previous export controls imposed on their more powerful chips during the Biden administration. However, Nvidia boss Jensen Huang revealed last week that Trump had reversed course and would allow H20 chips to be sold in China. Critics have argued that China-based companies were circumventing the export controls to acquire Nvidia's hardware. That speculation surged earlier this year after reports that China-based AI firm DeepSeek had a greater supply of Nvidia chips than it publicly admitted. The FT said it reviewed evidence that Chinese distributors in the Guangdong, Zhejiang and Anhui provinces had sold Nvidia's B200 and other restricted chips such as the H100 and H200. The FT said there was no evidence that Nvidia had any involvement or knowledge of illicit chip sales to Chinese entities. The company has long said that it complies with all US laws on chip technology. "Trying to cobble together data centers from smuggled products is a losing proposition, both technically and economically," Nvidia said in a statement. "Data centers require service and support, which we provide only to authorized Nvidia products." Last month, the chip supplier became the first public company in history to surpass a $4 trillion market valuation.
[64]
In China, repair demand for banned Nvidia AI chipsets booms
BEIJING/SHANGHAI -- Demand in China has begun surging for a business that, in theory, shouldn't exist: the repair of advanced Nvidia artificial intelligence chipsets that the U.S. has banned the export of to its trade and tech rival. Around a dozen boutique companies now offer repair services, according to two such firms in the tech hub of Shenzhen which say they predominantly fix Nvidia's H100 graphics processing units (GPUs) that have somehow made their way to the country, as well as A100 GPUs and a range of other chips. Even before it was launched, the H100 was banned from sale in China in September 2022 by U.S. authorities keen to rein in Chinese technological development, particularly advances that its military could use. Its predecessor, the A100, was also banned at the same time after being on the market for over two years. "There is really significant repair demand," said a co-owner of a firm that has been fixing Nvidia's gaming GPUs for 15 years and began working on AI chips in late 2024. Business has been so good that the owners created a new company to handle those orders, which now repairs up to 500 Nvidia AI chips per month. Its facilities, as shown in social media advertising, include a room which can accommodate 256 servers, simulating customers' data center environments to conduct testing and validate repairs. The rapid growth of the repair industry from late last year supports the view that there has been a significant amount of smuggling of Nvidia chipsets into China. Tenders have shown that the government and the military have made purchases of the U.S. firm's banned AI chips. Concern about large-scale smuggling of high-end Nvidia products into China has prompted both Republican and Democratic lawmakers to introduce bills that would require the tracking of chipsets so that their location can be verified after they are sold. U.S. President Donald Trump's administration also backed the idea this week. The thriving repair industry also highlights how Nvidia's advanced GPUs remain in high demand despite new, albeit less powerful, products from Chinese tech giant Huawei. Though the buying, selling and repair of Nvidia GPUs is not illegal in China, sources for this article were reluctant to draw scrutiny from U.S. or Chinese authorities and declined to be identified. Nvidia cannot legally provide repair or replacement items for restricted products in China. In contrast, sources said if an Nvidia GPU in another nation has a defect and is under warranty, which is normally three years, the company usually replaces it. An Nvidia spokesperson said only the company and authorized partners "are able to provide the service and support that customers need. Using restricted products without approved hardware, software, and technical support is a nonstarter, both technically and economically." Nvidia has only just been allowed to recommence sales of its H20 AI chipset, which has been specifically developed for China to comply with U.S. restrictions. Switching over to H20 chipsets is, however, not necessarily a simple or good option for Chinese entities. Price is an issue as one H20 server with eight GPUs inside will likely cost more than 1 million yuan (US$139,400), industry sources say. H20 chipsets, which have increased memory bandwidth, have been specifically designed for AI inference work, but firms involved in the training of large language models would likely prefer H100 chipsets which are better suited to that task. Industry sources said some of the H100 and A100 GPUs in China have been crunching data around the clock for years now, leading to an increase in failure rates. Depending on how frequently a GPU is used and how often it is maintained, an Nvidia GPU generally lasts two to five years before needing to be repaired, they said. According to the first source, his company charges between 10,000 yuan and 20,000 yuan ($1,400 to $2,800) to fix a GPU depending on the complexity of the problem. The second Shenzhen-based repair service provider - which shifted from GPU rentals to repairs this year - says it can repair up to 200 Nvidia AI chips each month, charging about 10 per cent of the GPUs' original selling price per repair. Services generally include software testing, fan repair, printed circuit board and GPU memory fault diagnostics and repair, as well as the replacement of broken parts. In the meantime, smuggling of high-end Nvidia chips continues. Traders of chips in China say customer demand is pivoting to top-of-the-line B200 chips which Nvidia began shipping to other countries in larger quantities this year. A server with eight B200 GPUs costs more than 3 million yuan in China, they said.
[65]
Nvidia H20 Chip Faces CAC Scrutiny Over AI Chip Security Concerns
Nvidia H20 Chip Under CAC Investigation Amid Rising China Tech Regulation Concerns Due to Security Management China's top internet regulator has flagged security concerns over the Nvidia H20 chip. The development casts doubt over the chipmaker's future in the Chinese market just weeks after the US reversed an export ban on this model. The Cyberspace Administration of China (CAC) summoned Nvidia on Thursday to question whether the contains 'backdoor' features that could compromise data security and user privacy. The regulator showed concern over US proposals to embed tracking or positioning capabilities within artificial intelligence chips that might be used overseas for commercial purposes. These suspicions have once more revived geopolitical tensions in the tech space.
[66]
In China, repair demand for banned Nvidia AI chipsets booms
BEIJING/SHANGHAI (Reuters) -Demand in China has begun surging for a business that, in theory, shouldn't exist: the repair of advanced Nvidia artificial intelligence chipsets that the U.S. has banned the export of to its trade and tech rival. Around a dozen boutique companies now offer repair services, according to two such firms in the tech hub of Shenzhen which say they predominantly fix Nvidia's H100 graphics processing units (GPUs) that have somehow made their way to the country, as well as A100 GPUs and a range of other chips. Even before it was launched, the H100 was banned from sale in China in September 2022 by U.S. authorities keen to rein in Chinese technological development, particularly advances that its military could use. Its predecessor, the A100, was also banned at the same time after being on the market for over two years. "There is really significant repair demand," said a co-owner of a firm that has been fixing Nvidia's gaming GPUs for 15 years and began working on AI chips in late 2024. Business has been so good that the owners created a new company to handle those orders, which now repairs up to 500 Nvidia AI chips per month. Its facilities, as shown in social media advertising, include a room which can accommodate 256 servers, simulating customers' data centre environments to conduct testing and validate repairs. The rapid growth of the repair industry from late last year supports the view that there has been a significant amount of smuggling of Nvidia chipsets into China. Tenders have shown that the government and the military have made purchases of the U.S. firm's banned AI chips. Concern about large-scale smuggling of high-end Nvidia products into China has prompted both Republican and Democratic lawmakers to introduce bills that would require the tracking of chipsets so that their location can be verified after they are sold. U.S. President Donald Trump's administration also backed the idea this week. The thriving repair industry also highlights how Nvidia's advanced GPUs remain in high demand despite new, albeit less powerful, products from Chinese tech giant Huawei. Though the buying, selling and repair of Nvidia GPUs is not illegal in China, sources for this article were reluctant to draw scrutiny from U.S. or Chinese authorities and declined to be identified. Nvidia cannot legally provide repair or replacement items for restricted products in China. In contrast, sources said if an Nvidia GPU in another nation has a defect and is under warranty, which is normally three years, the company usually replaces it. An Nvidia spokesperson said only the company and authorised partners "are able to provide the service and support that customers need. Using restricted products without approved hardware, software, and technical support is a nonstarter, both technically and economically." REPAIR DEMAND MAY NOT FADE Nvidia has only just been allowed to recommence sales of its H20 AI chipset, which has been specifically developed for China to comply with U.S. restrictions. Switching over to H20 chipsets is, however, not necessarily a simple or good option for Chinese entities. Price is an issue as one H20 server with eight GPUs inside will likely cost more than 1 million yuan ($139,400), industry sources say. H20 chipsets, which have increased memory bandwidth, have been specifically designed for AI inference work, but firms involved in the training of large language models would likely prefer H100 chipsets which are better suited to that task. Industry sources said some of the H100 and A100 GPUs in China have been crunching data around the clock for years now, leading to an increase in failure rates. Depending on how frequently a GPU is used and how often it is maintained, an Nvidia GPU generally lasts two to five years before needing to be repaired, they said. According to the first source, his company charges between 10,000 yuan and 20,000 yuan ($1,400 to $2,800) to fix a GPU depending on the complexity of the problem. The second Shenzhen-based repair service provider - which shifted from GPU rentals to repairs this year - says it can repair up to 200 Nvidia AI chips each month, charging about 10% of the GPUs' original selling price per repair. Services generally include software testing, fan repair, printed circuit board and GPU memory fault diagnostics and repair, as well as the replacement of broken parts. In the meantime, smuggling of high-end Nvidia chips continues. Traders of chips in China say customer demand is pivoting to top-of-the-line B200 chips which Nvidia began shipping to other countries in larger quantities this year. A server with eight B200 GPUs costs more than 3 million yuan in China, they said. (Reporting by Che Pan in Beijing and Casey Hall in Shanghai; Additional reporting by Stephen Nellis in San Francisco; Editing by Anne Marie Roantree and Edwina Gibbs)
[67]
Exclusive-Nvidia orders 300,000 H20 chips from TSMC due to robust China demand, sources say
BEIJING/SHANGHAI/NEW YORK (Reuters) -Nvidia placed orders for 300,000 H20 chipsets with contract manufacturer TSMC last week, two sources said, with one of them adding that strong Chinese demand had led the U.S. firm to change its mind about just relying on its existing stockpile. The Trump administration this month allowed Nvidia to resume sales of H20 graphics processing units (GPUs) to China, reversing an effective ban imposed in April designed to keep advanced AI chips out of Chinese hands due to national security concerns. Nvidia developed the H20 specifically for the Chinese market after U.S. export restrictions on its other AI chipsets were imposed in late 2023. The H20 does not have as much computing power as Nvidia's H100 or its new Blackwell series sold in markets outside China. The new orders with Taiwan's TMSC would add to existing inventory of 600,000 to 700,000 H20 chips, according to the sources who were not authorised to speak to media and declined to be identified. For comparison purposes, Nvidia sold around 1 million H20 chips in 2024, according to U.S. research firm SemiAnalysis. Nvidia CEO Jensen Huang said during a trip to Beijing this month that the level of H20 orders it received would determine whether production would begin again, adding that any restart to the supply chain would take nine months. The Information reported after Huang's trip that Nvidia had told customers it had limited H20 stocks available and it had no immediate plans to restart wafer production for the GPU. Nvidia needs to obtain export licenses from the U.S. government to ship the H20 chips. It said in mid-July it had been assured by authorities that it would get them soon. The U.S. Department of Commerce has yet to approve those licenses, one of the sources and a third source said. Nvidia on Monday declined to comment on the new orders or the status of its license applications. TSMC declined to comment. The U.S. Commerce Department did not immediately respond to a request for comment. Nvidia has asked Chinese companies interested in purchasing Nvidia H20 chips to submit new documentation including order volume forecasts from clients, said one of the sources and a fourth source. KEY PRODUCT IN US-SINO TRADE WAR The Trump administration said the resumption of H20 sales was part of negotiations with China over rare earth magnets - elements essential for many industries and which Beijing had limited exports of as trade war tensions escalated. The decision drew bipartisan condemnation from U.S. legislators who are worried that giving China access to the H20 will impede U.S. efforts to maintain its lead in AI technology. But Nvidia and others argue that it is important to retain Chinese interest in its chips - which work with Nvidia's software tools - so that developers do not completely switch over to offerings from rivals like Huawei. Before the April ban, Chinese technology giants including Tencent, ByteDance and Alibaba substantially increased H20 orders as they deployed DeepSeek's cost-effective AI models as well as their own models. The popularity of Nvidia products in China, despite the advent of rival, albeit less powerful, offerings from Huawei, has been underscored by a boom in repair demand for its other banned GPUS - many of which have been smuggled into the country. After the April ban on H20 sales, Nvidia warned that it would have to write off $5.5 billion in inventories, while Huang told the Stratechery podcast that the company also had to forgo $15 billion in potential sales. (Reporting by Liam Mo in Beijing, Brenda Goh in Shanghai and Karen Freifeld in New York; Additional reporting by Che Pan in Beijing and Wen-Yee Lee in Taipei; Editing by Edwina Gibbs)
[68]
China's Cybersecurity Regulator Summons Nvidia Over Chip Security Issue
China's cybersecurity regulator has summoned Nvidia representatives to discuss the security risks of artificial-intelligence chips it sells in China. The Cyberspace Administration of China wants Nvidia to explain the "backdoor security risks" associated with its H20 chips sold in China and submit relevant documents, it said Thursday. The move is aimed at "safeguarding the network and data security of Chinese users" given that American industry experts had said Nvidia's chips had tracking and remote-shutdown capabilities. Nvidia didn't immediately respond to a request for comment. Nvidia said earlier this month that it could resume its H20 AI chip sales in China, months after the U.S. Commerce Department restricted its sales amid escalating U.S.-China trade tensions. The chip was specially designed for Chinese customers to meet U.S. export rules and has been a top seller in the country since 2024.
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Nvidia's H20 AI chip, designed for the Chinese market, faces scrutiny from both US and Chinese authorities, highlighting the complexities of international AI chip trade and raising concerns about cybersecurity and export controls.
Nvidia's H20 AI chip, designed specifically for the Chinese market to comply with US export restrictions, has become the center of a complex geopolitical and technological controversy. The chip, which was recently approved for export to China by the Trump administration, is now facing scrutiny from both US and Chinese authorities
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.Source: Analytics Insight
In a surprising turn of events, China's Cyberspace Administration has summoned Nvidia to address what it calls "serious security issues" with the company's AI chips. The regulator claims that US AI experts have revealed that Nvidia's computing chips have location tracking capabilities and can be remotely shut down
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. This allegation comes shortly after Nvidia CEO Jensen Huang visited Beijing to meet officials and customers, emphasizing the company's commitment to the Chinese market1
.Source: Wccftech
The controversy surrounding the H20 chip highlights the challenges faced by US export control policies. Despite restrictions, at least $1 billion worth of Nvidia's advanced AI processors, including the more powerful B200, were reportedly smuggled into China in the three months following tightened export controls
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. This has exposed the limitations of Washington's efforts to restrain Beijing's high-tech ambitions.The scarcity of these high-end chips in China has led to the emergence of an underground repair industry. Reports suggest that around a dozen small firms in Shenzhen now provide repair services for advanced Nvidia GPUs, primarily handling A100 and H100 units. One company reportedly repairs up to 500 GPU units per month, charging between $1,400 and $2,800 per GPU
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.Nvidia has denied the presence of any backdoors in their chips, stating, "Cybersecurity is critically important to us. Nvidia does not have 'backdoors' in our chips that would give anyone a remote way to access or control them"
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. The company has also placed a new order for 300,000 H20 AI GPUs with TSMC to meet the surging demand in China, indicating a shift in strategy5
.Source: Economic Times
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The situation has sparked debate among US lawmakers and national security experts. Some argue that selling advanced chips to China could pose risks to US national security, while others, including Nvidia CEO Jensen Huang, contend that China will develop cutting-edge AI with or without US technology
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.As Nvidia navigates these complex waters, the H20 chip has become a symbol of the ongoing US-China tech rivalry. The company's ability to balance political pressures, cybersecurity concerns, and market demands will likely shape the future of international AI chip trade and influence the global AI landscape
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