Huawei’s New AI Chip Will Challenge Nvidia: WSJ By Investing.com

Huawei Technologies is moving closer to releasing a new AI chip, the Ascend 910C, that is challenging NVIDIA ( NVDA ) despite US sanctions, according to a Wall Street Journal report on Tuesday.

The publication, citing people familiar with the matter, said Chinese technology companies have tested the chip, which Huawei is said to have told potential customers rivals Nvidia’s (NASDAQ: ) H100, a chip that is not directly available in China.

Huawei’s progress underscores its ability to circumvent US-imposed barriers, backed by substantial state support.

However, production delays and potential new U.S. restrictions loom, potentially limiting access to critical components for AI hardware, the WSJ said.

Huawei is in talks to supply more than 70,000 chips, valued at about $2 billion, with deliveries likely to begin in October, according to the WSJ.

However, they add that final orders and delivery schedules could change.

The company’s efforts to advance its chip technology are part of a broader Chinese initiative to reduce reliance on American technology. Since being placed on the US entity list in 2019, Huawei has faced significant obstacles, including restricted access to manufacturing facilities and critical components.

In response to US export controls that blocked Nvidia’s most advanced chips from China, Huawei’s new chip aims to fill the void. Nvidia has introduced a less powerful H20 chip for the Chinese market, but Huawei’s manufacturing problems and US sanctions have caused delays in shipments of its existing 910B chip, according to the WSJ.

Despite these challenges, the WSJ notes that some analysts suggest Huawei’s 910C could surpass Nvidia’s planned B20 chip if production goes smoothly, potentially changing market dynamics in China.