- US restrictions on Nvidia give Huawei a chance to gain more market share.
- Baidu recently purchased servers with Huawei’s Ascend 910B processors.
- The move appears to be an attempt to reduce reliance on Nvidia hardware for AI applications.
In March of this year, Huawei’s rotating chairman, Eric Xu, made a bold claim that technology restrictions imposed by Washington would ultimately strengthen China’s domestic semiconductor industry, rather than weaken it. “I believe that China’s semiconductor industry will not sit idle, but will take efforts to … self-strengthen and self-reliance,” he said during a press conference in March 2023. He also boldly declared that China’s chip industry will be “reborn” thanks to American sanctions.
He was not entirely wrong and he was not alone in his prediction. Months after the US imposed strict export controls on October 7, 2022, China has begun to make progress, especially in semiconductor technology. China even went that far represents a 5G smartphone which contains a domestically manufactured miniaturized silicon chip, which many analysts previously thought unattainable by Chinese companies after the US-led ban on the technology.
Cries from China signaled the limits of US-led sanctions. So what could the US do to better limit China’s expansion? The Biden administration has targeted the hottest commodity on the market: AI chips.
Last month, the US Commerce Department unveiled new rules intended to close loopholes left after last year’s restrictions on the export of AI chips entered into force.
Earlier restrictions banned the sale of Nvidia H100, the processor of choice for AI companies worldwide, especially in the US and China. After that, Chinese companies could buy a somewhat slowed-down version called H800 or A800 which is specifically made to comply with US restrictions (primarily by slowing down the connection speed on the device, called the interconnect).
The updated rules also banned those ‘slower’ chips, leaving Chinese companies scrambling for supplies. Experts were quick to explain that the restrictions would immediately cut off the significant and growing market for AI semiconductors. Nvidia believes that the restrictions could hurt its business in the long run, but what is certain is that amid all the American efforts to cripple China’s technological progress is that it will actually boost Chinese development, not hinder it.
Huawei could make up for the lack of AI chips in China
Huawei, known worldwide for its telecommunications and smartphones business, has been actively developing a production line of AI chips for the past four years. It showcased its foray into AI technology at Huawei Connect 2018, releasing two chips, a neural network computing architecture, a development tool, and a cloud-based training framework for AI.
What would stand out if introduced amid the current fascination with artificial intelligence is Huawei’s Ascend AI series of chips, which at the time included the Ascend 910 and Ascend 310. The chips were made available in 2019, the year Huawei was hit by the hardest hit of US restrictions.
At the time, Huawei claimed its chip was the world’s most powerful AI processor, and according to Chinese media reports, the initial Ascend 910 chip was manufactured using a 7-nanometer manufacturing process. With this process, the chip could not significantly challenge Nvidia’s supremacy, neither on the domestic nor on the international market.
Nvidia has launched its A100 and H100 chips in 2020 and 2022, taking the lion’s share of the global AI chip market, further fueling the trend the rise of generative artificial intelligence. The main product to compete with Nvidia’s A100 chip would later be the Ascend 910B.
Analysts also noted that Nvidia had a significant advantage over Huawei as an incumbent, largely due to existing AI projects that rely on Nvidia’s well-established software ecosystem.
Although Huawei has its own ecosystem called CANN, experts say it has limitations in training AI models compared to Nvidia’s ecosystem. But there have been some changes in China lately, and Huawei could once again be in the race to take some of the market share of Nvidia’s AI chips.
According to the report of Reuters this week, Baidu, one of China’s leading AI companies, ordered 1,600 of Huawei’s 910B Ascend AI chips. Baidu has been a long-time client of Nvidia, so the move shows how Chinese companies are exploring alternatives to the latter’s products due to US export restrictions.
Reuters indicated that the order from Baidu was for 200 servers.
When was Huawei’s Ascend 910B introduced?
Huawei has not made an official announcement regarding the Ascend 910B, but it is undoubtedly a revised version of the Ascend 910. Sconcrete details about the chip emerged through comments from Chinese companies and academics, along with technical information available on Huawei’s website.
In August this year, Liu Qingfeng, president of the Chinese AI company iFlytek, praised Huawei to develop a GPU that it compared to Nvidia’s A100. He mentioned that iFlytek is working with Huawei on hardware development. After that, the Chinese media Yicai reported that the hardware in question was powered by the previously unreleased Ascend 910B chip.
Within the same month, documents related to the Ascend 910B, such as drivers and firmware upgrade guides, began appearing on Huawei’s website. Even during iFlyTek’s recent earnings call, senior vice president Jiang Tao reiterated that the Ascend 910B’s capabilities are comparable to Nvidia’s A100.
“Analysts and insiders suggest that the 910B chips offer comparable raw computing power to Nvidia’s chips, but may lag slightly behind in overall performance. Despite this, they are considered the most advanced domestically produced option available in China,” the report said Reuters reads
Maybe that’s what Huawei’s CFO is Meng Wanzhou meant when she He said the company would become big in the field of artificial intelligence “by building a solid computing base for China – and other options for the world.”