Nvidia's China reception is buying time for Huawei

DON'T BE FOOLED

- CATHERINE THORBECKE Bloomberg

DON'T BE FOOLED by China's icy response to America's policy reversal that will allow a key Nvidia Corp. artificial intelligence 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're buying time for Huawei Technologies Co. to catch up while keeping trade talks pressure on the US.

CEO Jensen Huang was greeted with fanfare by industry leaders in Beijing last month after news broke that the 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 H20s, 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.