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US chip export restrictions open door for Huawei to gain ground in China's AI chip market
Shashwat SankrantiUpdated: Oct 23, 2023, 12:51 PM IST
Visitors walk past the Huawei logo at the World Artificial Intelligence Cannes Festival (WAICF) in Cannes, France, February 10, 2023. Photograph
Reuters)Recent measures by the US aimed at restricting the export of advanced artificial intelligence (AI) chips to China could pave the way for Huawei Technologies to expand its presence in the $7 billion Chinese market, as Nvidia is compelled to step back, according to analysts.
\According to Reuters, while Nvidia has traditionally held a dominant position in the Chinese AI chip market, with a market share exceeding 90 per cent, Chinese companies, including Huawei, have been working on developing their versions of Nvidia's best-selling chips, such as the A100 and H100 graphics processing units (GPUs).
Huawei's Ascend AI chips are considered comparable to Nvidia's in terms of raw computing power, though they currently lag in performance. The limitation for Chinese firms was their reliance on Nvidia's chips and software ecosystem. However, US restrictions could alter this dynamic, creating an opportunity for Huawei to establish a stronger foothold. Reuters quoted Jiang Yifan, chief market analyst at Guotai Junan Securities, as saying, "This US move, in my opinion, is actually giving Huawei's Ascend chips a huge gift."
While this opportunity presents itself, challenges remain. Many cutting-edge AI projects are built with CUDA, a popular programming architecture pioneered by Nvidia, which has created a vast global ecosystem capable of training sophisticated AI models. Huawei's alternative, CANN, is more limited in this regard. To win over clients in China, Huawei must replicate the ecosystem Nvidia has developed, including facilitating the transfer of data and models to its platform. Intellectual property rights, with many held by US firms, further complicate the situation.
If Huawei succeeds in capturing Nvidia's market share, it could register another victory against US export controls. Over the past year, Huawei has shown signs of resilience against these restrictions by introducing advanced products, including a smartphone chip and advancements in chip design tools. The company is also positioning itself as a key provider of computing power for AI. Huawei's partners in China, such as iFlyTek, have been working with the Ascend 910 to train AI models, demonstrating the potential of Huawei's AI offerings.
As Huawei pushes towards self-sufficiency, President Xi Jinping's championed agenda; it is likely to find support in its endeavours. This situation represents a disruption to near-term supplies but a significant boost to China's long-term self-sufficiency goals. While Nvidia has held a dominant ecosystem, analysts believe that given time and a substantial customer base, domestic players could surmount these challenges.
US chip export restrictions open door for Huawei to gain ground in China's AI chip market
Recent measures by the US aimed at restricting the export of advanced artificial intelligence (AI) chips to China could pave the way for Huawei Technologies to expand its presence in the $7 billion Chinese market, as Nvidia is compelled to step back, according to analysts.
