"NVIDIA denies installation of covert monitoring tools in their products, following allegations that US authorities secretly insert trackers in AI chip deliveries"
The tech industry is abuzz with news about NVIDIA's H20 AI GPU, a popular choice among large Chinese AI firms, which has found itself at the centre of a dispute between NVIDIA and two governments.
Chinese AI firms are under pressure from government officials to void NVIDIA's H20 GPUs due to ongoing national security concerns. The dispute revolves around AI GPU exports and national security concerns, with the Trump administration announcing that NVIDIA and AMD would pay the US government 15% of revenue garnered from sales of H20 and MI330 AI chips in China.
The future of NVIDIA's H20 AI GPU exports to China remains uncertain due to ongoing US export controls and Chinese import regulations. However, NVIDIA's CEO, Jensen Huang, reached an agreement with President Trump to resume selling H20 GPUs to China on July 14.
The report of trackers in AI shipments comes at a critical time for NVIDIA as it tries to resume shipping its H20 AI GPUs to China while dealing with national security concerns from both governments. NVIDIA denies installing any tracking devices in its products, and Dell claims it's not aware of a US government initiative to place trackers in its product shipments.
The use of trackers in export shipments is a law enforcement method that has been in use for decades. It's unclear if the 15% levy is the right price to pay for allowing China to build up its AI foundation, potentially for use in its military, or if it's a distraction from potential national security risks on China's side.
NVIDIA is the world's largest supplier of AI accelerators, with an estimated 90% market share. After an initial ban on H20 sales to China in April 2025, which forced NVIDIA to write off $5.5 billion in inventory, the U.S. government reversed this decision in mid-July 2025, allowing export licenses for the H20 chip to be granted again. NVIDIA has since placed a substantial new order of 300,000 H20 GPUs from TSMC to meet strong demand from major Chinese tech companies like Tencent, ByteDance, and Alibaba.
However, these exports still require U.S. Commerce Department approval for the licenses, which NVIDIA expects soon but with no confirmed timeline. Despite this reopening, tensions remain high amid national security concerns and reports of unauthorized shipments or trackers being discovered in AI chip exports, highlighting the sensitive and politically charged nature of the trade.
In a blog post titled "No Backdoors. No Kill Switches. No Spyware," NVIDIA's Chief Security Officer, David Reber Jr., reaffirmed the company's commitment to maintaining the security and privacy of its products.
The Reuters report suggests that trackers have been found in AI shipments from Dell and Super Micro, containing NVIDIA and AMD chips. Beijing officials are uneasy about the flood of H20 AI GPUs into China. NVIDIA ordered 300,000 extra H20 AI chips from TSMC to meet China's demand, in addition to an existing stockpile of 600,000 to 700,000 H20 GPUs.
This news underscores the complexities and challenges faced by tech companies in navigating international trade and national security concerns. As the situation continues to evolve, it will be interesting to see how NVIDIA manages its exports to China while maintaining its position as a global leader in AI technology.
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- The controversial H20 AI GPU, a popular choice among large Chinese AI firms, is manufactured by NVIDIA, a company known for its 90% dominance in the AI accelerator market.
- Dell, one of the tech companies that ships products containing NVIDIA chips, has stated it is not aware of any US government initiative placing trackers in product shipments.
- The ongoing national security concerns have put Chinese AI firms under pressure from government officials, and have led to disputes between tech companies like NVIDIA and governments over AI GPU exports.
- NVIDIA's future PC and Xbox updates may benefit from the advancements in AI technology as it continues to invest in its H20 AI GPU production, aiming to meet the strong demand from major Chinese tech companies like Tencent, ByteDance, and Alibaba.
