NVIDIA’s China-Specific AI Accelerators Gaining Popularity As Huawei Chips Face Supply Issues

NVIDIA's China-compliant AI GPUs have finally started to gain sales traction, as the domestic tech giants are fed up with Huawei's supply issues.

NVIDIA has witnessed another lifeline for its relevance in the Chinese markets, as Morgan Stanley reports that the firm's AI offerings have started to appeal to Chinese tech giants like Baidu, Alibaba, Tencent, and ByteDance. Local media also reiterates this development, claiming that Chinese companies have started to place massive orders for NVIDIA's cut-down H20 AI accelerator, giving yet again another opportunity for Team Green to consolidate its dominance over the domestic markets.

For those unaware, when harsh US regulations struck the rapidly growing AI markets in China, NVIDIA was restricted to offering cut-down models of its AI accelerators; however, regional companies saw this move as an opportunity, and they started to prefer domestic solutions like Huawei's Ascend 910B chips. This move made NVIDIA's relevancy in Chinese markets more doubtful than ever, and it was predicted that the firm might lose a larger portion of its revenue stream from China, but by the looks of it, Jensen & Co. have avoided this.

Supply chain sources, such as Taiwan's Inventec, a server and data center provider, say that H20 AI GPUs have started to attract mass attention. Surprisingly, the reason behind this is Huawei's incompetency in providing AI chips to Chinese customers.

While it may be seen as a "blessing in disguise" for NVIDIA, sources report that Huawei's AI chips did receive the attention they deserved; however, the company's production lines weren't ready for the huge order flow. It is said that the yield of Huawei's AI chips is only around 20%, and with sanctions in play, upscaling facilities is a difficult move.

The delivery schedule for Huawei’s AI chips has been delayed, and as a result, the plan for Chinese cloud service providers to reduce their dependence on NVIDIA by using Huawei’s chips has failed.

- Taiwan media via Chosun

Well, despite the H20 AI accelerator being much inferior to the H100 in performance, it looks like Chinese tech companies are forced to opt for NVIDIA offerings, and on the other hand, Team Green's products have shown their dominance over domestic AI chips, and while they may be on-par or slightly behind in performance, no one can match the supply chain NVIDIA has established.

This will certainly hurt Huawei's journey into the AI markets, and for Team Green, well, it could prove to be the next "gold rush," considering domestic markets alone.

News Source: Chosun Biz