Huawei Seizes AI Chip Opportunity: U.S. restrictions on the export of advanced artificial intelligence (AI) chips to China may inadvertently provide an opportunity for Huawei Technologies to expand its presence in its $7 billion domestic market as Nvidia faces constraints, analysts suggest.
Historically, Nvidia has been the dominant provider of AI chips in China, boasting a market share exceeding 90%. However, Chinese companies, including Huawei, have been working on their versions of Nvidia’s popular chips, such as the A100 and H100 graphics processing units (GPUs). While Huawei’s Ascend AI chips offer raw computing power comparable to Nvidia’s, they still lag in terms of performance.
The U.S. restrictions could open doors for Huawei to gain ground in the market. Many AI projects use Nvidia’s CUDA programming architecture, which has given rise to a vast global ecosystem capable of training advanced AI models. Huawei’s alternative, called CANN, is more limited in terms of AI models it can train, making it challenging for Huawei chips to be a direct substitute for Nvidia.
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To win Chinese clients over Nvidia, Huawei must replicate Nvidia’s ecosystem, including helping clients transition their data and models to Huawei’s platform. Intellectual property rights present another challenge, as many key GPU patents are held by U.S. firms.
If Huawei can gain a foothold in Nvidia’s market, it would mark another victory against U.S. sanctions imposed since 2019. Huawei has been working to assert its independence by developing domestic products, such as the Ascend GPUs, as well as a smartphone chip and chip design tools.
The company is also striving to be a major provider of computing power for AI, with a goal to offer a “second option” for the world. Huawei is partnering with Chinese companies, including iFlyTek, a leading Chinese AI software firm, to leverage its Ascend chips for AI model training. President Xi Jinping’s drive for self-sufficiency in China is likely to support this endeavor.
The U.S. restrictions are a short-term disruption but could contribute to long-term self-sufficiency goals, facilitating the development of domestic alternatives to Nvidia’s dominant ecosystem.
Our Reader’s Queries
Did Baidu order 1600 of Huawei’s 910B Ascend AI chips?
Baidu has recently purchased 1,600 of Huawei Technologies’ 910B Ascend AI chips, which were designed as a substitute for Nvidia’s A100 chip. The order was intended for 200 servers, and by October, Huawei had already delivered over 60% of the order, which equates to approximately 1,000 chips for Baidu.
What does an AI chip do?
AI chips are specialized accelerators that are utilized in machine learning models, particularly deep neural networks (DNNs). These chips are designed to enhance performance by optimizing tasks and increasing the capacity for larger datasets. By utilizing AI chips, machine learning models can process data more efficiently and effectively, resulting in improved accuracy and faster results.
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