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Key Takeaways
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Huawei is reportedly making a new artificial intelligence (AI) chip to challenge Nvidia’s AI chips amid tightening export controls on U.S. semiconductor technology.
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Nvidia’s most capable AI chips are banned from export to China, but the chipmaker offers less capable versions that comply with trade restrictions.
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Some experts said Huawei could eat into Nvidia’s market share in the region, while others said existing trade restrictions and expectations around tightening controls could mean there would be little impact.
Huawei is reportedly working on a new artificial intelligence (AI) chip to challenge Nvidia’s (NVDA) chips amid tightening export controls on U.S. semiconductor technology.
The China-based tech company’s reported new chip could eat into market share lost by Nvidia amid U.S. trade restrictions affecting AI chips, the Wall Street Journal reported Tuesday.
Geopolitical Tensions Threaten Nvidia’s Share of the China Market
Nvidia offers the H20 chip in China, a version of its H200 offered to American customers that is capable of running AI workloads with lower computing power, to comply with U.S. export controls.
Due to the restrictions, Chinese companies wouldn’t have access to Nvidia’s highly anticipated Blackwell AI chip, though there have been reports that Nvidia is working on a new AI chip that would comply with export rules.
What Would Huawei’s New AI Chip Mean For Nvidia?
While some see Huawei’s new AI chip eating into Nvidia’s market share in China, others say it would have minimal effect.
SemiAnalysis analysts said that if Huawei makes a more capable AI chip and trade restrictions persist, “Nvidia would lose market share rapidly in China,” the Wall Street Journal reported.
However, Jefferies analysts said they would expect little impact since “Nvidia is already heavily restricted in China,” with “nothing left to ban.” While Nvidia’s AI chips for the China market have received some criticism for being less capable than Huawei’s offerings, both lag behind Nvidia’s products on the U.S. market.
The analysts added that there are “widespread expectations” that Nvidia’s H20 chip could also be banned, which would squeeze Nvidia’s share of the AI chip market in the region.
Nvidia shares were up over 5% at $115.39 in afternoon trading Tuesday, and have more than doubled in value since the start of the year.
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Source Agencies
