Nvidia voices concerns over Huawei's escalating AI chip proficiency to American legislators
Huawei's AI Chips vs Nvidia's H20 In a private meeting between Nvidia bigwigs and the US House Foreign Affairs Committee last week, discussions on Huawei's AI chips and the potential advantage from Nvidia chip restrictions in China surfaced. Apparent is how this could make Huawei's chips more competitive.
In response to the Room 'n' Rumble, Nvidia spokesman John Rizzo expressed that Jensen spoke about the critical significance of AI as fundamental infrastructure and the need for nurturing US manufacturing. Emphasizing Nvidia's wholehearted support for government initiatives promoting American technology worldwide.
Nvidia's chips, vital for whipping up chatbots, image generators, and various AI systems, have been under US export control ever since Trump's first stint as president. To play by the ever-evolving rules, Nvidia has crafted chips for the Chinese market.
Notably, there's a chip dubbed the H20.
Enrichment Data:
The H20 Scuffle
- License Limitations: The US now demands open-ended licenses for Nvidia's H20 exports to China, citing potential risks from its use in Chinese supercomputers. This follows regulations enacted in April 2025, which continued Biden-era restrictions originally put in place under Trump's reign.
- Revenue Knock: In 2024, Nvidia shipped approximately a million H20 units to China. However, China-based datacenter sales now contribute less to Nvidia's overall revenue due to controls. As a result, the company anticipates charging $5.5 billion in associated costs for Q1 2026.
- Production Vow: To lessen regulatory strain, Nvidia plans to shell out more than $100 million for boosting AI chip manufacturing in the US.
Huawei Rising
While specifics regarding Huawei’s AI chips aren’t revealed, the background implies:- Market Growth Spaces: US restrictions on Nvidia present opportunities for homegrown players, such as Huawei, to swipe market share in AI chips.- Performance Questions: The H20 is designed as a watered-down export version for China. If Huawei's Ascend chips manage to carve a name for themselves as feasible alternatives, they might gain traction. However, it's uncertain if they'll match Nvidia's global offerings performance-wise.
The Bigger Picture
- Supply Chain Threats: Chinese companies are pushing harder to establish self-sustaining AI hardware ecosystems domestically.
- Political Smackdown: The regulations boost the US-China tech divorce, with Nvidia trapped between complying with requirements and retaining access to the Chinese market. Analysts caution that these controls might weaken US semiconductor dominance by fostering foreign options.
Caught in the crossfire, Huawei might reap the benefits from Nvidia's restricted China operations. But Chinese AI chip makers face technical and supply chain obstacles to capitalize on the situation.
- Nvidia's spokesman, John Rizzo, stated that Jensen had emphasized the importance of AI as fundamental infrastructure and the need for nurturing US manufacturing, expressing full support for government initiatives promoting American technology worldwide.
- The H20 chip, crucial for various AI systems, is under scrutiny as the US government demands open-ended licenses for its exports to China due to potential risks from its use in Chinese supercomputers.
- Huawei, with market growth spaces opened by US restrictions on Nvidia, could potentially seize market share in AI chips if their Ascend chips are shown to be feasible alternatives, even though it's unclear if they will match Nvidia's global offerings in terms of performance.
- Huang, the Nvidia executive, acknowledged the strategic importance of AI technology, and in response to the challenges posed by the H20 scuffle and US regulations, Nvidia announced plans to invest over $100 million to boost AI chip manufacturing in the US.
