AsianFin -- Nvidia Corporation on Tuesday denied rumors of supply shortage on certain chips due to H20, a China-tailored artificial intelligence (AI) chip to comply with the Biden-era export controls amid trade tensions between the world’s top two economies.
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Nvidia in a statement posed on X said reports claiming the supply was constrained and H100 and H200, processors under Hopper architecture, were "sold out" are incorrect. “As we noted at earnings, our cloud partners can rent every H100/H200 they have online — but that doesn't mean we're unable to fulfill new orders,” the company said.”We have more than enough H100/H200 to satisfy every order without delay.”
Nvidia also dismissed the rumor about H20. “The rumor that H20 reduced our supply of either H100/H200 or Blackwell is also categorically false — selling H20 has no impact on our ability to supply other NVIDIA products,” said the Santa Clara, California-based company.
The clarification came as H20, the most powerful AI chip Nvidia is allowed to sell China, is facing increasing uncertainties due to China’s national security concerns.That clouded the chips’ return to China when the Trump administration on August 8 has started issuing licenses for the sale of H20 chips to China.
China’s Cyberspace Administration (CAC) on July 31 called Nvidia representatives into a meeting to discuss what it deemed serious security vulnerabilities with the H20 chip. The internet regulator in a statement cited comments by U.S. lawmakers about the need to install tracking capabilities into advanced chips sold to other countries. The agency asked staff to explain potential risks and provide documents as needed, the CAC said in the statement.
Nvidia firmly denied allegations of “backdoors” or remote access capabilities in its H20 AI chips. A company spokesperson emphasized that cybersecurity remains a top priority and asserted that Nvidia’s chips do not contain any features that would allow unauthorized remote control, as Chinese authorities seek explanations about potential risks in the chip widely used across China’s AI sector.
But Nvidia’s response didn’t seem to reassure Beijing. China’s state media outlet People’s Daily on August 1 criticized Nvidia for the security concerns. In a commentary published on August 1, the paper called for Nvidia to provide "convincing security proofs" to allay fears of potential risks in its chips and win back market trust.
Yuyuan Tantian, a social media account affiliated with the state-run broadcaster China Central Television (CCTV) on Sunday in an article posted on WeChat had flagged security concerns over Nvidia’s H20, citing potential backdoor access in the chips.
The article claimed the chips are neither advanced technologically speaking, nor environmentally friendly or secure. “When a type of chip is neither environmentally friendly, nor advanced, nor safe, as consumers, we certainly have the option not to buy it,” the article concluded.
Nvidia last month was reported to face China’s further steps targeting H20 chips. The Financial Times on August 12 reported Beijing is demanding Chinese tech firms, including Alibaba and ByteDance, justify purchases of Nvidia’s H20 AI chips. China would prefer that the firms buy domestically.
The tech companies have been reportedly asked by regulators such as the Ministry of Industry and Information Technology (MIIT) to explain why they need to order Nvidia’s H20 chips instead of domestic alternatives. Some of firms, which were the main buyers of Nvidia’s H20 chips before their sale in China was restricted by the U.S. government, were reported to plan to scale back their orders as a result of the questions from regulators.
One Chinese data center operator said the purchase of H20 is not prohibited, but “has kind of become a politically incorrect thing to do”, per the report.
Bloomberg reported the same day that the Chinese government over the past weeks has sent notices to a range of domestic companies discouraging use of the less-advanced semiconductors. It was said that the guidance was particularly strong against the use of Nvidia’s H20 chips for government or national security-related work by state-own companies or private firms.
China’s AI market last week was reported to face supply shortage of Nvidia’s older chips including H100 and H200 as H20 sales were restricted. The industry is truning to reburbished and used Nvidia chips after reported Bejing’s ban, Digitimes reported on Auguest 27. the ban had let to surging demand for older A100 and H100 cards as firms strip down and reconfigure them into “low-cost, high-performance” custom inference systems, per the report.
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