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Chinese authorities have urged local companies to avoid using Nvidia’s H20 chips, particularly for government-related purposes, Bloomberg News reported yesterday, a move likely to hamper the company efforts to service the key China market.
Several companies were sent official notices discouraging the use of the H20, a less-advanced chip, mainly for any government or national security-related work by state enterprises or private companies, the report said, citing people familiar with the matter.
Nvidia said yesterday the H20 chip was “not a military product or for government infrastructure”.
“China has ample supply of domestic chips to meet its needs. It won’t and never has relied on American chips for government operations, just like the U.S. government would not rely on chips from China,” the statement said.
Washington last month lifted a ban on the sale of the H20 chip in China and it is now the most advanced artificial intelligence chip that Nvidia is allowed to sell there.
The move comes after reports in China’s state media of security concerns around H20 chips. Nvidia has said there are no “backdoors” that would allow remote access or control.
Beijing is pressuring China’s large tech firms such as Alibaba and ByteDance over orders of H20 chips, the Financial Times reported yesterday.
The companies have been asked by the Ministry of Industry and Information Technology to explain why they need to order H20 chips instead of using domestic alternatives, the report said, citing people familiar with the matter.
Some tech companies were planning to reduce their orders as a result of the questions from regulators, the report said.
The Information reported the companies along with Tencent Holdings, have been ordered by China’s internet regulator in the past two weeks to suspend their purchases of Nvidia chips altogether, citing data security concerns with the chips.
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