Nvidia Photo: VCG

Reuters reported on Wednesday that Nvidia has built location verification technology that could indicate which country its chips are operating in, a move that the report claimed could help prevent its artificial intelligence chips from being smuggled into countries where their export is banned. A Chinese market analyst noted that the reported move could spark data security concerns among customers, including those in China.
 
The feature, which Nvidia has demonstrated privately in recent months but has not yet released, would be a software option that customers could install. It would tap into what are known as the confidential computing capabilities of its graphics processing units (GPUs), Reuters reported, citing sources familiar with the matter.

When asked to comment on the report and whether China would have any security concerns about taking Nvidia chips, Chinese Foreign Ministry spokesperson Guo Jiakun said on Wednesday that he was not familiar with the specifics mentioned.  

Reuters reported the feature will first be made available on Nvidia's latest "Blackwell" chips, which have more security features for a process called "attestation" than Nvidia's previous generations of Hopper and Ampere semiconductors, but Reuters reported that Nvidia is examining options for those prior generations, citing a Nvidia official.

If released, Reuters said Nvidia's location update could address calls from the White House and lawmakers from both major political parties in the US Congress for measures to prevent smuggling AI chips to China and other countries where their sale is restricted.

"Chips are an extremely sensitive product, as they serve as the fundamental foundation for all computing processes. For all buyers, it is essential to ensure the security of their data, usage, and management, said Ma Jihua, a veteran market watcher told the Global Times on Wednesday. 

For a company like Nvidia, if it possesses the capability for remote localization and embeds this feature directly into its chips, it could not dismiss cybersecurity concerns among customers, Ma said.   

Nvidia has not responded to a Global Times' request for comment as of press time on Thursday.

Reuters' report came after media reported that the US government will allow Nvidia to export the more advanced H200 AI chips to China. 

Nvidia has welcomed the move as its CEO Jensen Huang has made repeated public remarks about the importance of the Chinese market and risks of losing it.

If Nvidia hopes to sell its chips normally in the Chinese market, it must address this location-verification technology issue. Otherwise, domestic enterprises would certainly hesitate to make purchases, Ma said. 

China's cyberspace regulator in late July already summoned Nvidia over security risks concerning its H20 AI chip sold to China.

The company was asked to give explanations and submit relevant proof materials on this issue. This is aimed at safeguarding cyberspace and data security for Chinese users per laws on network and data security and personal information protection, according to the Cyberspace Administration of China (CAC).

Recently, Nvidia's AI chips have been alleged to pose serious security risks, and some US lawmakers have called for advanced chips that are exported to be equipped with "tracking and positioning" functions, according to the CAC. Comments by AI experts in the US disclosed that the "tracking and positioning" and "remote shutdown" technologies of Nvidia chips have matured, the CAC said in the statement.

Xiang Ligang, a Chinese telecom industry expert, said previously that the chip could be remotely controlled, allowing the supplier to shut it down or reduce its performance at critical moments, potentially disrupting normal operations.

"Given that AI chips are primarily used for high-performance inference tasks, this raises concerns about their reliability and stability," Xiang told the Global Times previously.