Nvidia, the US chip design firm, is set to challenge Huawei’s dominance in China with its newly-tailored H20 chips. These powerful graphics processing units (GPUs) are specifically designed for artificial intelligence (AI) training and boast similar performance capabilities to Huawei’s Ascend 910B, according to industry sources. The H20 is priced between $12,000 and $15,000, similar to the Ascend 910B. Nvidia has started taking pre-orders for the H20, while the Ascend 910B is available through various sales channels in China. However, US trade sanctions prevent Nvidia from exporting its more advanced GPUs to China, leading them to develop the H20 as an alternative.
It seems that Nvidia’s move could disrupt Huawei’s control in the Chinese market, as its authorized distributors have already begun discussing shipments of the H20 with Chinese clients. Some clients are expected to start testing the chip soon, with the first volume shipments arriving in China in the second quarter. A major Chinese internet gear and server maker anticipates starting shipments of their products containing the H20 in July. A small number of Chinese clients have already received H20 samples for testing purposes.
Nvidia’s GPUs are highly sought-after by global tech firms and cloud services providers, with Chinese companies investing billions of dollars to secure supplies for the new era of generative AI technologies. In fact, Nvidia’s data center segment exceeded video gaming for the first time in its 2023 financial year, becoming the top revenue contributor. The company’s data center revenue in the third quarter of that year surged 279% year on year, reaching a record $14.51 billion.
However, it remains to be seen how Chinese clients will respond to the H20, given that the chip’s capabilities have been constrained to meet the new US rules. While some sources suggest that the H20 falls behind its predecessors, the A800 and A100, in terms of performance, a source from a server maker indicates that the situation is still unclear as full in-house testing is not yet complete.
The battle between Nvidia and Huawei in the Chinese market highlights the ongoing tensions between the US and China, particularly in the tech industry. As both companies vie for dominance in the AI chip market, the competition is not only about delivering powerful hardware but also navigating international trade regulations. The outcome of this competition will have significant implications for the future of AI development in China and beyond.
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