Nvidia Corp (NASDAQ:NVDA) faces competition from Huawei Technologies Co’s latest AI chip, the Ascend 910B, which a Huawei executive claims matches or surpasses Nvidia’s A100 in some tests.

The Ascend 910B delivers 80% of the A100’s efficiency when training large language models and can outperform it by 20% in other tests.

These claims come amid strict US export restrictions that prevent Nvidia from shipping advanced GPUs to China, SCMP reports.

Huawei introduced the Ascend series in 2019 and has built a robust proprietary software and hardware ecosystem.

Despite the constraints, Huawei’s AI strategy has gained traction, with the Ascend chips adopted by major Chinese tech firms like Tencent Holding Ltd (OTC:TCEHY), Baidu Inc (NASDAQ:BIDU), and iFlyTek. Huawei’s AI chips are integral to its goal of achieving technological self-sufficiency in China as it continues to expand its influence in the domestic market.

Analysts have noted Chinese manufacturers’ challenges in producing high-performance AI computing chips using older systems.

AI chips like Nvidia’s A100 are significantly more extensive and complex than typical smartphone chips.

However, Huawei’s Ascend 910B and Kunpeng chips have emerged as viable alternatives for domestic AI applications.

According to an analyst, while Huawei’s best chips are still technologically inferior to Nvidia’s latest GPUs, the company’s AI strategy and domestic market adaptations present substantial competition to Nvidia within China.

Reportedly, China’s leading chip manufacturer, Semiconductor Manufacturing International Corp, has been ramping up its chip production with domestic tools.

Prior reports indicated Tencent’s development of AI chips to gain a slice of Nvidia’s market share, which dominated up to 90% of China’s $7 billion AI chip market.

Meanwhile, Intel Corp (NASDAQ:INTC) and Nvidia remain committed to the Chinese market with their tailor-made AI chips.

Nvidia recently reached a market valuation of over $3 trillion, beating Apple Inc (NASDAQ:AAPL) as the second most valuable company. This Wednesday, Nvidia added close to $150 billion in market cap.

Price Action: NVDA shares were trading lower by 1.15% at $1,196.05 at the last check on Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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