Huawei Seizes Opportunity in AI Chip Market as U.S. Curbs Benefit Chinese Tech Giant
U.S. restrictions on the sale of advanced artificial intelligence (AI) chips by Nvidia to China have opened up a window of opportunity for Huawei to gain market share. Sources indicate that Huawei has secured a significant AI chip order from Chinese tech giant Baidu this year.
While Huawei is better known globally for its telecoms and smartphone businesses, it has been developing an AI chip line for the past four years. Its Ascend AI chip series, specifically the 910B model, is aimed at rivaling Nvidia’s A100 chip.
Huawei entered the AI chip business with the unveiling of its Ascend 910 in 2018, followed by its official launch in 2019. This move was part of the company’s strategy to build a complete AI portfolio and establish itself as a computing power provider. However, the same year, Huawei became the target of U.S. export controls.
The original Ascend 910 chip, manufactured on a 7-nanometer process, was claimed by Huawei to be the world’s most powerful AI processor. The chip boasted impressive performance metrics, including the ability to deliver 256 TeraFLOPS for half-precision floating point operations and 512 TeraOPS for integer precision calculations.
Despite these claims, the Ascend 910 chip failed to challenge Nvidia’s dominance in both domestic and international markets. Nvidia’s introduction of the A100 and H100 chips in 2020 and 2022 respectively solidified its position as the leading player in the AI chip market. Experts attribute Nvidia’s advantage to its well-established software ecosystem, which Huawei’s ecosystem, called CANN, is considered more limited in terms of AI model training capabilities.
Huawei’s latest chip, the 910B, has not been officially announced but has been mentioned in public comments by Chinese companies and academics, as well as in technical guides on Huawei’s website. Chinese AI giant iFlyTek’s chairman, Liu Qingfeng, praised Huawei for producing a GPU that he claimed was comparable to Nvidia’s A100. It was later revealed that the GPU was powered by the Ascend 910B chip.
Documents related to the Ascend 910B, including driver and firmware upgrade guides, have appeared on Huawei’s website since August. Baidu reportedly ordered 1,600 Huawei 910B chips for 200 servers in August, according to a source.
While the 910B chips are said to be comparable to Nvidia’s in terms of raw computing power, they still lag behind in performance. Nevertheless, they are seen as the most advanced domestic option available in China.
This development is significant for Huawei and China, as analysts estimate China’s AI chip market to be worth $7 billion. Gaining market share from Nvidia would be a win for Huawei and a blow to the United States. Huawei has expressed its ambition to become a key provider of computing power for AI, with its CFO, Meng Wanzhou, stating in September that Huawei aims to offer the world a “second option” in computing, referring to the dominant position of U.S. providers.
In the absence of Nvidia chips, Chinese AI firms will have to rely on domestic alternatives like Huawei’s less powerful chips. However, analysts believe that Huawei has the potential to close this gap, given the strong support and investment from the Chinese government in AI and semiconductors.
Overall, the U.S. restrictions on Nvidia’s AI chips have inadvertently provided an opportunity for Huawei to strengthen its position in the AI chip market and challenge the dominance of American companies.
