NVIDIA Chip Controversy: Jim Cramer Insists No Backdoors Exist

NVIDIA Corporation's (NVDA) chips have been the subject of controversy regarding potential backdoors and reliance on American hardware. Jim Cramer insists there are no backdoors in NVIDIA's chips, citing the company's transparency and trustworthiness. Cramer believes that NVIDIA's chips are the best in the market and that concerns about backdoors are unfounded.

NVIDIA Corporation (NVDA) has responded to allegations from Chinese state media that its H20 artificial intelligence chips pose a national security risk. The company has categorically denied claims of "backdoors" in the chips, which would supposedly allow remote access or control. This denial comes amidst heightened tensions between the U.S. and China over semiconductor export controls, as the U.S.-China tariff truce deadline approaches [1].

Earlier this week, a Chinese state media outlet reported that NVIDIA's H20 chips are neither environmentally friendly nor advanced, and could potentially include a "kill switch" feature that allows for remote shutdown. In response, a NVIDIA spokesperson told CNBC that "cybersecurity is critically important to us. NVIDIA does not have 'backdoors' in our chips that would give anyone a remote way to access or control them" [1].

The allegations stem from concerns raised by Chinese regulators, who have asked NVIDIA to provide a comprehensive explanation addressing these security concerns. Despite the company's denials, the scrutiny is ongoing, with Chinese authorities requesting detailed documentation to prove that the H20 chips pose no security threats [2].

NVIDIA's CEO, Jensen Huang, recently visited China to stress the company's commitment to the Chinese market. The company has maintained that the H20 chips were designed specifically for the Chinese market following export restrictions on more advanced AI chips in late 2023 [3].

The H20 chips, a less-advanced semiconductor compared to NVIDIA's flagship H100 and B100 chips, were developed for the Chinese market. Despite the allegations, demand for the H20 chips remains strong, with China recently ordering about 300,000 units from TSMC [4].

The U.S. Commerce Department has approved the export of H20 chips to China, boosting investor confidence. Analysts maintain an "Outperform" rating on NVIDIA, with an average price target suggesting moderate growth [5]. The decision to allow H20 chip exports reflects a more nuanced U.S. approach to technology exports, distinguishing between highly sensitive components and those deemed less of a national security threat [6].

NVIDIA's stance on government surveillance access to its chips has also drawn attention. The company has firmly rejected any proposals to include backdoors or remote kill switches in its GPUs, arguing that such measures would compromise trust in U.S. technology [7].

References:
[1] https://www.cnbc.com/2025/08/10/nvidia-china-h20-chips.html
[2] https://www.techi.com/nvidia-china-investigation-h20-ai-chip-security-concerns/
[3] https://www.communicationstoday.co.in/nvidia-denies-chinese-claims-of-surveillance-backdoors-in-h20-ai-chip/
[4] https://www.ainvest.com/news/nvidia-h20-chip-export-approval-china-boosts-investor-confidence-2508/
[5] https://www.scmp.com/tech/big-tech/article/3321297/us-starts-issuing-licences-nvidia-export-h20-chips-china-official-says
[6] https://timesofindia.indiatimes.com/technology/tech-news/nvidia-ceo-visits-white-house-to-seek-licenses-for-designed-for-china-ai-chips-heres-what-made-him-personally-lobby-with-donald-trump/articleshow/123203385.cms
[7] https://coinmarketcap.com/