Nvidia (NVDA, Financials) is facing renewed pressure in China after state-run newspaper People’s Daily said the chipmaker must deliver convincing security proofs to address concerns about potential risks in its products.
The commentary, titled Nvidia, how can I trust you? and posted on the outlet’s social media account Friday, said foreign companies must treat security as a basic prerequisite under Chinese law.
The warning came a day after the Cyberspace Administration of China said it was concerned about possible backdoor vulnerabilities in Nvidia’s H20 artificial intelligence chip. The regulator said it had called the company to a meeting to determine whether the chip posed any risk to Chinese user data and privacy.
A backdoor is a hidden way to bypass normal authentication or security controls. The concerns emerged weeks after the U.S. reversed an export ban on some Nvidia AI chips, a move that had been expected to support the company’s China sales.
In a statement to Reuters, Nvidia said cybersecurity is critically important and denied that its chips contain backdoors that could allow remote access or control.
The regulator also voiced concern over a U.S. proposal that advanced chips sold abroad be equipped with tracking and positioning functions.
Investors will be watching whether Beijing’s scrutiny affects Nvidia’s ability to sell high-end AI chips in one of its key markets.
This article first appeared on GuruFocus.
