Nvidia is on the defensive. Just as the AI giant secured a fragile, high-stakes deal to resume selling its specialized chips to China, the company is now being forced to fight back against accusations from Chinese state media that its products are a national security threat.
The attack, which came just hours after the deal with the Trump administration was reported, puts Nvidia in a geopolitical vise, caught between a skeptical Washington and a newly hostile Beijing.
According to Reuters, a social media account affiliated with state broadcaster CCTV accused the specialized H2O chips, which Nvidia designed for the Chinese market, of having a supposed “backdoor access” that could allow for remote control. The post also claimed the chips were neither technologically advanced nor environmentally friendly.
Nvidia’s response is swift.
“NVIDIA does not have ‘backdoors’ in our chips that would give anyone a remote way to access or control them,” a spokesperson said in a statement.
The company elaborated on its position in a recent blog post, arguing that calls from some policymakers to build “kill switches” into its hardware are fundamentally misguided.
“Embedding backdoors and kill switches into chips would be a gift to hackers and hostile actors,” the company wrote. “It would undermine global digital infrastructure and fracture trust in U.S. technology.” Nvidia stressed the crucial role its chips already play in trusted systems worldwide, from medical scanners to air-traffic control.
The Deal That Sparked the Fire
This new firestorm in Beijing was ignited by the unconventional deal Nvidia just struck with Washington. To return to China after months of a federal ban, the company agreed to pay the Trump administration 15% of the revenue generated by its H2O chip sales there.
The deal was personally negotiated, and in a press conference on Monday, President Donald Trump offered a stunningly blunt assessment of the very technology he had just approved for export. He claimed he had initially asked for a 20% cut but that Nvidia CEO Jensen Huang negotiated it down. Trump then dismissed the H2O chips as “obsolete” and “an old chip that China already has.”
The president’s comments perfectly capture the absurd tightrope Nvidia is now forced to walk. To satisfy Washington, the company had to create a chip weak enough to be deemed “obsolete.” But to satisfy Beijing, it must sell a chip that is powerful enough to be worth buying and trustworthy enough not to be seen as a tool for American espionage.
Now, both sides are publicly questioning the product. The U.S. President is calling it old news, while Chinese state media is calling it a security risk. For Nvidia, the stakes are astronomical, and navigating the treacherous waters between these two global superpowers may prove to be the toughest deal of all.
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