Experts: China shows zero tolerance for chip backdoor risks in Nvidia probe

China's summoning of Nvidia showcases Beijing's zero tolerance towards chips with "backdoor" security risks, and such risks, if validated, will deal a huge blow to the US firm's global business, experts said on Friday.

The comments came after the Cyberspace Administration of China on Thursday summoned Nvidia over alleged security risks concerning its H20 AI chip sold to China.

Pan Helin, a member of the Ministry of Industry and Information Technology's Expert Committee for Information and Communication Economy, said it is in line with international practices for China to summon a company over security concerns.

"If Nvidia's chips really have backdoor risks, that will become its 'self-dug grave'. Users, not just companies in China, but clients across the world, may abandon its chips over fears of remote shutdowns or data theft," Pan said.

According to him, Nvidia's dominance in the global AI chip market relies not on chip performance alone but on its entrenched CUDA ecosystem—a 20-year-old framework for GPU compatibility. While Chinese chips such as Huawei's Ascend series may rival H20 technically, they lack CUDA's universal adaptability for AI models.

"However, if security concerns drive global users toward Chinese chips, developers could shift focus to compatibility layers for domestic alternatives, eroding Nvidia's ecosystem advantage," Pan said.

"Such concerns will accelerate the adoption of Chinese chips. Though ecosystem shifts take time, this could ultimately dismantle Nvidia's business," said Xiang Ligang, director-general of the Zhongguancun Modern Information Consumer Application Industry Technology Alliance, a telecom industry association.

Recently, Nvidia's artificial intelligence chips have been alleged to pose serious security risks, and some US lawmakers have called for advanced chips exported abroad to be equipped with "tracking and positioning" functions.

According to Xiang, it is technically viable for companies to have "tracking and positioning" functions on chips. But if Nvidia really does so, its business will be severely damaged.

Nvidia said in a statement to China Daily on Friday that cybersecurity is critically important to it and Nvidia does not have "backdoors" in its chips that would give anyone a remote way to access or control them.

Last year, the Cyber Security Association of China urged a comprehensive review of products from US tech company Intel, citing recurring cybersecurity vulnerabilities and high failure rates, so as to safeguard the country's national security and protect the rights of Chinese consumers.

On July 26, 2023, Wuhan Municipal Emergency Management Bureau published a statement that Qihoo 360 detected a cyberattack from overseas organization on its earthquake monitoring center. Some front-end station collection points of earthquake reporting data had been implanted with backdoor programs.