Zero tolerance for chips with security risks

China's summons to Nvidia over the alleged cybersecurity threat posed by the US company's H20 artificial intelligence chips sold to the country showcases Beijing's zero tolerance toward chips with "backdoor" security risks, experts said on Friday.

Such risks, if validated, will also deal a huge blow to the AI chipmaker's global business, they added.

Their comments came after the Cyberspace Administration of China summoned the company on Thursday over the issue.

Pan Helin, a member of the Ministry of Industry and Information Technology's Expert Committee for Information and Communication Economy, said China's decision to summon any company over security concerns is in line with international practices.

"If Nvidia's chips really have backdoor risks, that will become its 'self-dug grave'. Users, not only companies in China, but also clients across the world, may abandon its chips over fears of remote shutdowns or data theft," Pan said.

According to him, Nvidia's dominance in the global AI chip market relies not only on chip performance, but also on its entrenched CUDA ecosystem — a 20-year-old framework for GPU compatibility. While Chinese chips such as Huawei's Ascend series may rival H20 technically, they lack CUDA's universal adaptability for AI models.

"However, if security concerns drive global users toward Chinese chips, developers could shift focus to compatibility layers for domestic alternatives, eroding Nvidia's ecosystem advantage," Pan said.

"Such concerns will accelerate the adoption of Chinese chips. Though ecosystem shifts take time, this could ultimately dismantle Nvidia's business," said Xiang Ligang, director-general of the Zhongguancun Modern Information Consumer Application Industry Technology Alliance, a telecom industry association.

Nvidia's AI chips have recently faced allegations about serious security risks. Some US lawmakers have also called for advanced chips exported abroad to be equipped with "tracking and positioning" functions.

According to Xiang, it is technically possible for companies to have "tracking and positioning" functions on chips. But if Nvidia has really done so, its business will be dismantled, he said.

Nvidia said in a statement to China Daily on Friday that cybersecurity is critically important to it and that the company does not have "backdoors" in its chips that would give anyone a way to remotely access or control them.

Last year, the Cyber Security Association of China urged a comprehensive review of products from US tech company Intel, citing recurring cybersecurity vulnerabilities and high failure rates, in order to safeguard the country's national security and protect the rights of Chinese consumers.

On July 26, 2023, Wuhan's municipal emergency management bureau published a statement that Qihoo 360 detected a cyberattack from an overseas organization on its earthquake monitoring center. Some front-end station collection points of earthquake reporting data had been implanted with backdoor programs, the statement said.