China has summoned major internet firms Tencent, ByteDance, and Baidu over their purchases of Nvidia’s H20 chips, expressing concerns about information risks. Chinese regulators want to know why companies need to buy the chips when domestic suppliers are available.
Nvidia designed the H20 chip specifically for China after US export restrictions on its more advanced AI chips took effect in 2023. The company has faced scrutiny over potential backdoor security risks that could affect user data and privacy.
US sanctions on advanced chipmaking equipment have constrained domestic manufacturers’ ability to boost production, while Chinese companies are developing processors that rival the H20’s performance.
The move is likely to complicate Nvidia’s efforts to boost sales in China, where the company generated $17 billion from AI chip sales last year.
Source: https://www.reuters.com/world/china/china-cautions-tech-firms-over-nvidia-h20-ai-chip-purchases-sources-say-2025-08-12