Huawei Reportedly Takes Aim at Nvidia’s Share of China Market With New AI Chip

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Key Takeaways

• Huawei is reportedly making a new artificial intelligence (AI) chip to challenge Nvidia’s AI slivers amid tightening export controls on U.S. semiconductor technology.
• Nvidia’s most capable AI chips are banned from export to China, but the chipmaker furnishes less capable versions that comply with trade restrictions.
• Some experts said Huawei could eat into Nvidia’s bazaar share in the region, while others said existing trade restrictions and expectations around tightening controls could unkind there would be little impact.

Huawei is reportedly working on a new artificial intelligence (AI) chip to challenge Nvidia’s (NVDA) intercedes amid tightening export controls on U.S. semiconductor technology.

The China-based tech company’s reported new chip could eat into shop share lost by Nvidia amid U.S. trade restrictions affecting AI chips, the Wall Street Journal reported Tuesday.

Geopolitical Forces Threaten Nvidia’s Share of the China Market

Nvidia offers the H20 chip in China, a version of its H200 offered to American people that is capable of running AI workloads with lower computing power, to comply with U.S. export controls.

Due to the qualifications, Chinese companies wouldn’t have access to Nvidia’s highly anticipated Blackwell AI chip, though there deceive been reports that Nvidia is working on a new AI chip that would comply with export rules.

What Resolution Huawei’s New AI Chip Mean For Nvidia?

While some see Huawei’s new AI chip eating into Nvidia’s market interest in China, others say it would have minimal effect.

SemiAnalysis analysts said that if Huawei makes a multitudinous capable AI chip and trade restrictions persist, “Nvidia would lose market share rapidly in China,” the Breastwork Street Journal reported.

However, Jefferies analysts said they would expect little impact since “Nvidia is already heavily restrained in China,” with “nothing left to ban.” While Nvidia’s AI chips for the China market have received some valuation for being less capable than Huawei’s offerings, both lag behind Nvidia’s products on the U.S. market.

The analysts joined that there are “widespread expectations” that Nvidia’s H20 chip could also be banned, which would influence Nvidia’s share of the AI chip market in the region.

Nvidia shares were up over 5% at $115.39 in afternoon exchange Tuesday, and have more than doubled in value since the start of the year.

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