Chinese state media warns about Nvidia chips facing US tariff deadline

Chinese state media warns about Nvidia chips facing US tariff deadline

HONG KONG - Technology giant Nvidia is facing security concerns over its H20 chips, a social media account affiliated with Chinese state media reported on Sunday. As Washington and Beijing approach the deadline for trade negotiations in which technology has become a central issue, account Yuyuan Tantian, associated with state television CCTV, said the AI ​​chips may have "backdoors" affecting their functionality and security.

Security concerns about Nvidia's H20 chips

"If a chip is not environmentally friendly, advanced or safe, consumers certainly have the option not to buy it," said the commentary, which was published after a warning from China's cybersecurity agency about the chips' backdoor access. Nvidia has repeatedly denied that its products contain such backdoors.

Technology at the heart of trade conflicts

China's access to American technology, particularly cutting-edge chips that can be used in AI development, has become a central point of contention in the trade and technology conflicts between the two economic rivals as both fight for technological supremacy. A trade halt that reduced triple-digit tariffs between the two countries is set to expire on August 12. However, officials have signaled that an extension could come into effect following talks in Sweden last month.

New commercial agreements and resumption of sales

Last month, Nvidia said it would resume sales of the H20 chip to China after the White House reconsidered its export controls, which were put in place in April as U.S.-China trade tensions intensified. U.S. Treasury Secretary Scott Bessent said in an interview with Bloomberg that Nvidia's export controls were a "negotiating tool" in the larger U.S.-China trade talks.

Financial agreements with the US government

Nvidia and technology firm Advanced Micro Devices (AMD) have agreed to pay the US government 15% of their revenue from selling semiconductors to China in exchange for export licenses, the Financial Times reported on Sunday. This unprecedented consideration is part of a deal with the Trump administration to obtain export licenses to sell Nvidia's H20 chips and AMD's MI308 chips in China.

US politicians' concerns about security

Nvidia's announcement that it can export the H20 chips to China raised concerns among some U.S. lawmakers, who support strict controls to prevent China from using American technology to improve its military and AI systems. China's growing concerns about the security of the chips come after the White House last month recommended imposing export controls that would verify the location of advanced AI chips.

China's technology diversification efforts

China's security concerns appear to mirror those that the US has expressed about Chinese technology in the past, particularly regarding Chinese tech giant Huawei's growing influence over global communications infrastructure. Chinese leaders are also pushing for the country's tech companies to become self-sufficient and reduce their reliance on U.S.-made chips to meet Beijing's goals in AI and technology. Experts emphasize that controls over chips like the H20 could force China to accelerate its own innovation.

Changing negotiating positions and technical requirements

But the H20 chip isn't the only technology reportedly tied up in negotiations between the two sides. China wants the US to ease export controls on a critical component of AI chips as part of a trade deal ahead of a possible summit between President Donald Trump and Chinese leader Xi Jinping, according to another report from the Financial Times.

Chinese officials have told experts in Washington that Beijing wants the Trump administration to lift export restrictions on high-bandwidth memory chips (HBM). The US government introduced export controls on the sale of such memory chips to China last year.

Overall, the developments reflect a complex relationship between technological dependencies and the geopolitical tensions between the USA and China.