Recent US measures to restrict the export of advanced AI chips to China have the potential to impact companies such as Nvidia and AMD, which have been eyeing the Chinese market for expansion. However, Huawei could benefit from these chip restrictions and expand within its $7 billion domestic market. Huawei, a major provider of 5G equipment and smartphone chipsets, was previously restricted in various ways by the US but has since made a strong comeback in the smartphone market, surpassing Apple.
Nvidia, a prominent AI chip provider in China with over 90% market share, may face challenges due to the restrictions. Chinese companies, including Huawei, have been developing their versions of AI chips that are similar to Nvidia’s A100 and H100 graphics processing units (GPU). While Huawei’s Ascend AI chips have competitive computing power, they still lag behind in performance when compared to Nvidia’s offerings. Moreover, many Chinese firms have relied on Nvidia’s chips and software ecosystem, and the US restrictions may encourage them to seek alternatives.
For Huawei to seize this opportunity, it must develop an ecosystem similar to Nvidia’s and persuade clients to migrate their data and models to Huawei’s platform. Huawei’s Chief Financial Officer, Meng Wanzhou, previously indicated the company’s ambition to become a key provider of computing power for AI and offer the world an alternative to the US, albeit with the significant challenges of developing a robust ecosystem and convincing clients to make the shift.
