China Is Far More Eager to Use Nvidia's AI Chips Than It Lets On

China may be feigning angst over them just to buy time for Huawei

- Catherine Thorbecke

One should not be fooled by China's icy response to America's recent policy reversal that will allow a key Nvidia Corp artificial intelligence (AI) chip back on the mainland. The country's AI ambitions currently rely on Nvidia's hardware, and authorities know that—even if they won't admit it. But by fanning fears of alleged security or environmental concerns, they seem to be buying time for China's own Huawei Technologies Company to catch up while keeping trade-talk pressure on the US.

Nvidia's CEO, Jensen Huang, was greeted with fanfare by industry leaders in Beijing last month after news broke that America's Donald Trump administration will allow the sale of H20 chips to resume. It seemed like China got what it wanted: loosening export controls designed to hold back its AI sector has been a key sticking point during tariff negotiations.

Yet, in the weeks since the announcement, cyber authorities have summoned Nvidia to discuss alleged security risks related to the H20 chips; state media warned of potential backdoors that could cause a "nightmare," and the government urged local companies to avoid using the much sought-after processors for AI development.