Nvidia (NASDAQ:NVDA) crept lower as Chinese pressure over chip security ramped up, sending the stock down about 2% amid growing friction and a very public demand for convincing security proofs.
State-run commentary and a summon from the Cyberspace Administration of China over alleged backdoor risks in H20 chips injected new uncertainty, even as Nvidia pushed back, telling Reuters it has no backdoors and stressing that cybersecurity is critically important.
Company reps have already been interviewed by regulators, and the broad tone is tense: China frames the probe as protecting user data, while Nvidia is trying to keep its access to a key revenue market intact.
The timing matters. Nvidia had just signaled potential resumption of H20 AI chip sales in China after earlier U.S. export limits, a restriction it said cost roughly $15 billion in lost sales.
The firm has also rolled out a new Blackwell-based AI chip tailored for Chinese factory automation and logistics, trying to thread the needle between compliance and demand. If those security concerns stick or expand, it could bleed into sentiment on a stock that’s otherwise been riding strong performance this year.
Why it matters? the showdown makes China both a critical upside and a political risk; investors will be watching whether the probe leads to renewed export friction, independent security validation, or a de-escalation that keeps Chinese demand intact.
This article first appeared on GuruFocus.
