Baidu chooses Huawei AI chips over NVIDIA amid US pressure
Chinese tech giant Baidu has reportedly placed an order for 1,600 artificial intelligence (AI) chips from Huawei this year, reported Reuters citing two unnamed sources familiar with the matter. This development indicates a shift from NVIDIA and suggests that US pressure is pushing Chinese companies to consider Huawei's products as an alternative. Baidu was not previously known to be an AI chip customer of Huawei.
Order placed ahead of US export restrictions
The order for Huawei Technologies' 910B Ascend AI chips was made in August. This was prior to the US government's implementation of new rules in October, that tightened restrictions on chip exports to China, including those from US chip powerhouse NVIDIA. The order is valued at around Rs. 523 crore, with Huawei expected to deliver all the chips by year's end.
Significance of the order
While the order is small compared to the thousands of chips top Chinese tech firms have typically ordered from NVIDIA, it holds significance as it shows how some companies may be moving away from the US firm. Baidu, along with Tencent and Alibaba, has been a long-time customer of NVIDIA and was not previously known to be an AI chip client of Huawei.
Domestic alternative to NVIDIA
Although Huawei's Ascend chips are still viewed as far inferior to NVIDIA's in terms of performance, they represent the most advanced domestic option available in China. One source told Reuters, "They were ordering 910B chips to prepare for a future where they may no longer be able to purchase from NVIDIA."
Huawei's opportunity amid US curbs
Last month, analysts predicted that US export restrictions would create an opportunity for Huawei to grow in its $7 billion (roughly Rs. 58,291 crore) domestic market. The company has been under US export controls since 2019. This order adds to evidence of Huawei's technological progress as Beijing invests in its domestic semiconductor industry and encourages state-owned enterprises to replace foreign technology with local alternatives.
