Huawei Prepares For Bulk Shipment Of New Advanced AI Chip As China Seeks Nvidia Alternatives: Report

In the wake of China’s search for domestic alternatives to Nvidia‘s NVDA H20 chip, Huawei Technologies is reportedly preparing to start mass shipments of its advanced 910C artificial intelligence chip to Chinese customers as early as next month.

What Happened: The 910C chip from Huawei represents an architectural refinement rather than a groundbreaking technological leap. It reportedly matches the performance of Nvidia’s H100 by integrating two 910B processors into a single package using advanced integration methods, effectively doubling the computing power and memory capacity of the original 910B, as reported by Reuters on Wednesday.

According to Paul Triolo, a partner at the consulting firm Albright Stonebridge Group, following the U.S. administration’s decision to require an export license for Nvidia’s H20 chip sales, the 910C has the potential to become the preferred hardware for Chinese AI model developers.

Washington’s restrictions on China’s access to Nvidia’s advanced AI products have opened up opportunities for Chinese GPU startups like Moore Threads and Iluvatar CoreX to challenge Nvidia’s market dominance.

Doug O'Laughlin, a semiconductor analyst, told CNBC earlier on Monday, “With NVIDIA's H20 and other advanced GPUs restricted, domestic alternatives like Huawei's Ascend series are gaining traction."

Why It Matters: This development comes on the heels of the U.S. government’s new license requirements for selling AI-focused chips — Nvidia's H20 and AMD‘s AMD MI308 — to China, Hong Kong, Macau, and several D:5 countries. The move led Nvidia to take a $5.5 billion inventory charge, effectively preparing for a complete block in shipments.

Meanwhile, CEO Jensen Huang continued his high-profile tour in China including discussions with central government officials in Beijing on Friday. Notably, Beijing also invited many other U.S.-funded companies besides Nvidia to invest more in China.

These geopolitical tensions have created a unique opportunity for Huawei and other Chinese tech firms to fill the void left by Nvidia’s restricted access to the Chinese market. Nevertheless, analysts opine that Huawei and other local chip makers are far behind Nvidia’s H20 chip in terms of advancement. Phelix Lee, a Morningstar equity analyst specializing in semiconductors, is ‘very skeptical’ that Chinese chip foundries can produce enough H20 GPU alternatives to meet tech companies’ demand in the near future.

Benzinga's Edge Rankings highlight strong momentum and growth rankings for Nvidia in the 56th and 95th percentiles, respectively. Curious how other stocks stack up? Click here to uncover growth and momentum scores for top stocks.

Over the past 5 days, Nvidia stock declined 6.67%. During the pre-market session on Monday, it slumped 2.89%.