China Accuses Intel of Jeopardizing Its National Security Interests

• The Cybersecurity Association of China (CSAC) accused Intel of risking China's security and called for a security review of its products.
• The agency alleged that Intel's products are vulnerable and its operating systems can be exploited by the US National Security Agency (NSA) to create backdoors.
• Intel has denied these allegations and said that it's cooperating with the authorities to clear all their doubts and concerns.

Intel has been accused of intentionally jeopardizing China's national security and interests. On Wednesday, the Cybersecurity Association of China (CSAC) shared a long post against China on its official WeChat account. It said that Intel's products in China should be subjected to strict security review.

The CSAC is not an official government body. However, it has ties with the Chinese state. This means these accusations will be taken seriously and it might trigger an investigation from the country's cyberspace regulator, the Cyberspace Administration of China (CAC).

CAC has yet to respond. A review from CAC is a serious matter and if Intel fails the test, it can actually lose its Chinese market. For example, last year the agency prohibited domestic companies from buying products from US-based memory chipmaker Micron Technology Inc (MU) because it failed the review.

How Exactly Is Intel Risking Chinese Security?

The CSAC claims that Intel's Xeon processors, which are present in almost all Intel chips for AI task processing, have several defects.

• The quality of its products, the strength of its security, and the number of vulnerabilities are questionable and it's extremely irresponsible on Intel's part to be offering such products to its customers.
• The post also talks about Intel's operating systems which are allegedly exploitable and allow the US National Security Agency (NSA) to create backdoor entries.

What Does Intel Have to Say About This?

Intel has obviously denied these allegations and reiterated that safety and security have always been its top priority when manufacturing any product, including those for China.

We will maintain communication with the relevant authorities, clarify any concerns, and reaffirm our commitment to product safety and quality' - Intel on its official WeChat account

The timing of this post is interesting. Tension between the US and China is at an all-time high and the US has gone out of its way to minimize chip export to its rival to prevent its military from modernization. The US is worried that if China gets its hands on advanced technology, it might use it against the US.

Nvidia is already banned from exporting chips to China and the country is struggling to find a replacement. Now if chips from Intel are also banned, China's chip supply will really take a hit. China is also contemplating banning AMD and Nvidia chips from government devices.

But China is not the only one that'll suffer. Intel will also suffer major consequences. After the post was published, its stocks went down by 2.7%. Not just that, if this review goes against its favor and its chips are banned, it will lose its Chinese market which heavily contributes to its revenue. Last year, over a quarter of its revenue came from China.

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