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Evaluation-US chip curbs give Huawei an opportunity to fill the Nvidia void in China By Reuters



© Reuters. FILE PHOTO: FILE PHOTO: A emblem of Huawei Applied sciences is seen at its exhibition area, on the Viva Know-how convention devoted to innovation and startups at Porte de Versailles exhibition heart in Paris, France June 15, 2022. REUTERS/Benoit Tessier/F

By Josh Ye

HONG KONG (Reuters) – U.S. measures to restrict the export of superior synthetic intelligence (AI) chips to China could create a gap for Huawei Applied sciences to increase in its $7 billion house market because the curbs drive Nvidia (NASDAQ:) to retreat, analysts say.

Whereas Nvidia has traditionally been the main supplier of AI chips in China with a market share exceeding 90%, Chinese language companies together with Huawei have been growing their very own variations of Nvidia’s best-selling chips, together with the A100 and the H100 graphics processing items (GPU).

Huawei’s Ascend AI chips are similar to Nvidia’s when it comes to uncooked computing energy, analysts and a few AI companies resembling China’s iFlyTek say, however they nonetheless lag behind in efficiency.

Jiang Yifan, chief market analyst at brokerage Guotai Junan Securities, stated one other key limiting issue for Chinese language companies was the reliance of most initiatives on Nvidia’s chips and software program ecosystem, however that might change with the U.S. restrictions.

“This U.S. transfer, for my part, is definitely giving Huawei’s Ascend chips an enormous reward,” Jiang stated in a publish on his social media Weibo (NASDAQ:) account.

This chance, nevertheless, comes with a number of challenges.

Many leading edge AI initiatives are constructed with CUDA, a well-liked programming structure Nvidia has pioneered, which has in flip given rise to an enormous international ecosystem that has change into able to coaching extremely subtle AI fashions resembling OpenAI’s GPT-4.

Huawei personal model is known as CANN, and analysts say it’s far more restricted when it comes to the AI fashions it’s able to coaching, which means that Huawei’s chips are removed from a plug-and-play substitute for Nvidia.

Woz Ahmed, a former chip design govt turned marketing consultant, stated that for Huawei to win Chinese language purchasers from Nvidia, it should replicate the ecosystem Nvidia created, together with supporting purchasers to maneuver their knowledge and fashions to Huawei’s personal platform.

Mental property rights are additionally an issue, as many U.S. companies already maintain key patents for GPUs, Ahmed stated.

“To get one thing that is within the ballpark, it’s 5 or 10 years,” he added.

Huawei and Nvidia didn’t instantly reply to Reuters’ requests for remark.

COMPUTING POWER

If Huawei manages to seize Nvidia’s market share, it might declare one other victory towards america, which has focused the agency with export controls since 2019.

Huawei rolled out the primary Ascend GPUs that yr and it’s considered one of various merchandise – resembling its Concord working system – that the corporate says are totally homegrown.

Over the previous yr, the telecoms big has proven indicators that it’s beating again towards the U.S. curbs by unveiling a complicated smartphone chip and making claims of breakthroughs in chip design instruments.

It has additionally set its sights on changing into a key supplier of computing energy for AI, with Chief Monetary Officer Meng Wanzhou saying final month that Huawei needed to construct a computing base for China and provides the world a “second choice”, in a veiled reference to dominant supplier america.

Huawei’s companions in China to date embrace iFlyTek, a number one Chinese language AI software program firm which is utilizing the Ascend 910 to coach its AI fashions. IFlyTek was additionally blacklisted by america in 2019.

On Thursday, throughout iFlyTek’s earnings name, Senior Vice President Jiang Tao stated the Ascend 910B’s capabilities have been “similar to Nvidia’s A100” and introduced that it was growing a general-purpose AI infrastructure in China alongside Huawei.

“Our partnership now goals to allow domestically developed LLMs to be constructed with each homegrown {hardware} and software program know-how,” Jiang stated.

Different companions embrace state-owned software program companies Tsinghua Tongfang and Digital China. At a convention in July, Huawei stated its AI chips now assist energy greater than 30 massive language fashions (LLM) in China, which goes by way of a generative AI craze and at present has greater than 130 LLMs.

Charlie Chai, an analyst with 86Research, stated Nvidia’s ecosystem dominance was not “an insurmountable impediment if home gamers are given enough time and an enormous buyer base”.

China’s self-sufficiency push, which has been championed by President Xi Jinping, is prone to help this. “Briefly, a small disruption to near-term provides, however an enormous enhance to the long-term self-sufficiency agenda,” Chai added.

($1 = $1.0000)

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