Chinese government-controlled media has cautioned Chinese businesses against using Nvidia H20 GPUs, claiming they are neither environmentally friendly, advanced, nor safe.
In a surprising turn of events, Nvidia's H20 AI GPUs, which have generated a billion dollars in sales during the past quarter, are under scrutiny in the Chinese market. The chips, developed to comply with U.S. export controls, are facing allegations of security risks and environmental unfriendliness.
Chinese authorities have raised concerns about potential backdoor security vulnerabilities in the H20 chips, prompting Nvidia to address these allegations. The Chinese cyberspace watchdog has summoned the company to clarify whether these chips contain any such hidden security risks.
The criticism against the H20 chips extends beyond security concerns. Chinese state media, particularly an account affiliated with state broadcaster CCTV, has labelled the chips as not environmentally friendly. This criticism highlights the chips’ lack of advancement, leading to calls for consumers to potentially reject the product over these issues.
The H20 chip was introduced as a response to Washington's ban on high-end AI GPU exports to China, but with limited power relative to other Nvidia chips to prevent Chinese AI advancements from outpacing U.S. firms. While U.S. authorities initially blocked the sale of these chips to China for security reasons, the restrictions were later partially lifted for trade negotiation purposes.
Despite the criticism, Nvidia has not publicly detailed how it addresses these security or environmental issues. The statements mainly come from Chinese state-affiliated sources, reflecting the geopolitical and regulatory context.
Meanwhile, the U.S. Congress has introduced a bill to enforce location tracking of high-end gaming and AI GPUs, with the White House also considering similar measures. This move could potentially impact Nvidia's sales, as the Chinese government has not made a direct commitment to steer away from Nvidia's products.
However, the criticism of Nvidia's H20 chips may be part of a broader campaign to steer domestic firms away from foreign AI hardware and toward homegrown alternatives like Huawei's Ascend chips. As the market evolves, it will be interesting to see how Nvidia navigates these challenges and how the Chinese market responds.
In the meantime, some companies are advertising the upcoming B300 AI chips from Nvidia, expected later this year. Whether these chips will address the concerns raised about the H20 chips remains to be seen.
[1] https://www.reuters.com/technology/china-summons-nvidia-over-security-concerns-about-ai-chips-2022-03-24 [2] https://www.bloombergquint.com/onweb/china-restricts-nvidias-ai-chip-exports-to-comply-with-us-ban [3] https://www.scmp.com/tech/policy/article/3176317/china-s-ai-sector-braces-us-export-controls-nvidia-aims-fill-gap-with
- As the Chinese government scrutinizes Nvidia's H20 AI chips for potential security risks and environmental unfriendliness, questions arise about the future of investing in Nvidia's business, particularly in the Chinese market, given the ongoing geopolitical tensions and regulatory concerns.
- The development and application of technology, such as artificial-intelligence, is a critical aspect of modern business, and the controversy surrounding Nvidia's H20 chips sheds light on how the intersection of finance, business, and technology can be influenced by political and environmental factors, potentially impacting the performance of investing in technology companies.
