(MENAFN) The Cyberspace Administration of China (CAC) summoned U.S. semiconductor powerhouse Nvidia on Thursday to address what it described as "backdoor security risks" linked to the company's H20 AI chips.

“Recently, serious security issues with Nvidia's computing chips have been exposed. Previously, US lawmakers called for advanced chips exported from the US to be equipped with tracking and location capabilities,” the CAC said in a public statement.

The agency asserted that American AI researchers had uncovered capabilities in Nvidia’s chips, including advanced tracking, location services, and remote shutdown functions.

“To safeguard the network and data security of Chinese users, and in accordance with the Cybersecurity Law, the Data Security Law, and the Personal Information Protection Law, the Cyberspace Administration of China summoned Nvidia on July 31, 2025, requesting that the company explain the backdoor security risks associated with its H20 computing chips sold to China and submit relevant supporting documentation,” the statement continued.

The controversy follows Washington’s move in April to tighten restrictions on Nvidia’s H20 chip exports to China, demanding that the company obtain an export license to continue sales—a measure that U.S. officials say will remain in place "for the indefinite future."

In response to the restrictions, Nvidia projected a potential write-down of as much as $5.5 billion in its fiscal first quarter due to limited access to the Chinese market.

Despite those setbacks, Nvidia recently announced that it plans to restart sales of the H20 chips in China after the U.S. government signaled a reversal on its licensing constraints.

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