Nvidia's H20 Export License Conditions Were Exposed, And 15% Of Chip Revenue Was Handed Over To The U.S. Government

AMD and Nvidia have reportedly obtained semiconductor export licenses from China with unprecedented conditions.

Nvidia and AMD have agreed to give the U.S. government 15% of their revenues from chip sales in China, under an arrangement to obtain export licenses for the semiconductors, the Financial Times reported on Sunday.)

According to the Financial Times, Nvidia and AMD received U.S. licenses last week to export their H20 and MI308 artificial intelligence chips to the Chinese market, respectively, but on the condition that an unprecedented revenue-sharing agreement be reached. The Financial Times said that no U.S. company had ever agreed to share with the government as a condition of obtaining an export license, the Financial Times said.

The Financial Times quoted people familiar with the matter, including a U.S. official, as saying that the U.S. government has not yet decided how to use the funds.

In a comment sent via email on Sunday, an Nvidia spokesperson neither confirmed nor denied the report. "We abide by the rules set by the U.S. government for our participation in global markets," the spokesperson said. "Although we haven't exported H2O to China for several months, we hope that export control rules will keep the United States competitive in China and the global market."

AMD has not yet responded to a request for comment.

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Earlier on Sunday, Reuters reported that an article in Chinese state media said Nvidia's H20 chip, which Nvidia built specifically for the Chinese market to avoid U.S. export restrictions on advanced AI chips, poses a security risk, claiming that the chip could be remotely shut down through a "backdoor."

Nvidia denied the claim and said in an emailed statement on Sunday: "Cybersecurity is critical to us. Nvidia has no 'backdoors' in its chips that don't allow anyone to access or control them remotely. Another blog post published by Nvidia last week said that using a "backdoor" or "kill switch" would "undermine global digital infrastructure and undermine trust in American technology."

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Chinese state media criticized Nvidia's H20 chip as unsafe, not advanced and not environmentally friendly

After China's Cyberspace Administration interviewed American chip giant Nvidia on July 31, Chinese state media published an article on Sunday mentioning the United States' method of installing backdoors on chips, and criticized Nvidia's H20 chip as unsafe, unadvanced, and unenvironmentally friendly.

China's Cyberspace Administration interviewed Nvidia on July 31, asking for an explanation of chip vulnerabilities or backdoor security risks and submission of relevant supporting materials.

China CCTV's new media "Yuyuan Tantian" published an article on Sunday (August 10) pointing out that backdoors are mainly divided into two types, hardware backdoors and software backdoors. According to the article, hardware backdoors are physical devices left behind by chips during design or manufacturing, mainly logic circuits with backdoor functions; Software backdoors can be understood as implanting instructions with backdoor functions in software to cause damage to the user's system and steal secrets by running software.

The article further said that taking the NVIDIA H20 chip as an example, "from the perspective of hardware backdoors alone, functions such as remote shutdown can be fully realized."

Yuyuan Tan Tian quoted security experts from the Qianxin Threat Intelligence Center as saying that from a technical point of view, in the production stage, the hardware backdoor of the specific denial of service function is easier to implement, but the cost and cost of this method are relatively high, and the backdoor is installed through software settings or software and hardware cooperation, which is the most flexible.

Security experts at the Qianxin Threat Intelligence Center said that the starting point for the United States to shape artificial intelligence hegemony is hardware and software ecosystem. For other countries, it is not only necessary to strive for substitution from the hardware level, but also to build an independent and controllable software ecosystem.

The article also mentioned that in order to complete these arrangements, the United States has systematically designed an "on-chip governance mechanism". "This mechanism mentions that the U.S. government needs to set up relevant departments to coordinate all aspects of chip design, production, and manufacturing, including coordinating enterprises and allies, to achieve control of artificial intelligence chips."

The article quoted a report introducing the "on-chip governance mechanism" as saying that NVIDIA's artificial intelligence chips have actually widely deployed most of the functions required for on-chip governance, but some have not yet been activated; The report also suggests that in order to gain the cooperation of chip companies, some "incentives" can be taken, such as easing exports to "China's low-risk customers".

The article said: "Combined with this information, looking at the US government's permission to export Nvidia H20 to China, it is inevitable to think about it carefully." From any point of view, the H20 is not a safe chip for China. "

The article also points out that in addition to being unsafe, the H20 is not advanced. According to data from relevant institutions, compared with the standard version of H20, the overall computing power of H20 is only about 20%, the number of GPU cores is reduced by 41% and the performance is reduced by 28% compared with H100, which also leads to H20 being unable to meet the training needs of trillion-level large models.

The article also criticized H20 for not being environmentally friendly, saying that according to the calculations of relevant institutions, the energy efficiency ratio of H20 is about 0.37 TFLOPS/W, which does not meet the energy saving level of 0.5 TFLOPS/W.

Yuyuan Tan Tian finally wrote in the article that when a chip is neither environmentally friendly, nor advanced, nor safe, "as consumers, we can of course choose not to buy it." "

The H20 is a chip made by Nvidia specifically for the Chinese market. In April, the Trump administration implemented new regulations to include H20 in export controls. U.S. President Donald Trump lifted the ban last month, and Nvidia immediately submitted an export application. But three weeks after the ban was lifted, U.S. officials still haven't started issuing licenses, much to Nvidia's chagrin.

The Financial Times quoted people familiar with the matter as saying that Nvidia CEO Jensen Huang went to the White House on Wednesday (August 6) and held another meeting with Trump. The U.S. Department of Commerce began issuing permits two days after the talks.

The report also mentioned that H20 has become a point of contention between U.S. security officials and Nvidia. Security officials say H20 may help China develop its military power, but Nvidia believes that blocking U.S. exports will force China to accelerate innovation.