The emergence of a new advanced artificial intelligence chip from Huawei could threaten U.S. semiconductor giant Nvidia (NASDAQ:NVDA) in the near term, according to analysts at Piper Sandler.
Huawei is looking to begin mass shipments of its 910C AI processor to Chinese customers as early as next month, Reuters reported earlier this week. The 910C is more of an architectural evolution than a technological advancement and offers comparable performance to Nvidia’s H100 offering, Reuters said.
Citing sources familiar with the matter, the news agency said that some shipments of the 910C — known as Ascend — may have already been made.
The release comes at an opportune time for Chinese AI firms, many of whom have been racing to find domestic providers after more stringent U.S. rules on the export to China of Nvidia’s high-end H20 chip were put in place by the Trump administration.
Earlier this month, the White House told Nvidia that sales of the H20 must require an export license. The move was seen as the latest push by Washington to curb China’s development in critical technologies, particular in its military.
In a note to clients, the Piper Sandler analysts led by Harsh Kumar argued that, even if the restrictions on H20 exports to China were not enacted, the 910C would still have provided Chinese customers “with a viable second source at minimum with much less risk.”
“The economic war with China is set to continue with the Trump Administration and efforts from both sides to make it harder to do business will likely not stop in the future,” the analysts wrote.
“As such, any future generations of compute chips for China from Nvidia will most likely come under threat in our view.”
They added that Nvidia’s key operations in China could be hit in the longer term if the U.S. export controls persist in their current form and give Huawei more time to “bridge the performance gap.”
However, the analysts argued that the rules may not be strict enough, and create “plenty of loopholes” that give China access to critical technologies such as high-bandwidth memory and leading-edge wafer production.
“[T]he U.S. government has the potential to close some of the loopholes that Huawei currently has access to in order to taper their technology innovation,” they said.
