Chinese company designated as 'National Security Threat' in the US takes on Nvidia with AI chip

Chinese manufacturer Huawei was labeled as a ‘national security threat’ by the US in 2020. Now, according to a report by WSJ, Huawei is now developing a new and powerful artificial intelligence processor which will compete with some of the high-end AI chips produced by American chip manufacturer Nvidia. The report also adds that Huawei is preparing to test the latest series chip, the 910D. Huawei aims for its latest processor, the Ascend 910D , to match the performance of Nvidia's widely acclaimed H100 AI training chip, launched in 2022. The company has reportedly engaged several Chinese tech firms to assess the processor's capabilities, with initial samples anticipated by late May.


Huawei to give competition to NvidiaThis development underscores the resilience of China's semiconductor industry despite ongoing efforts by the U.S. government to impede its progress through trade restrictions and limitations on access to Western chip-making technology. Huawei, despite being on a U.S. trade blacklist for nearly six years, has emerged as a key player in China's push for self-sufficiency in critical technology sectors. The company previously demonstrated its ability to overcome some U.S. sanctions with the release of its advanced Mate 60 smartphone in 2023, powered by a domestically produced processor.

The report also mentions that the Huawei Ascend 910D uses some advanced packaging technologies which integrate multiple silicon dies resulting in a faster and better performance. Huawei aims that its new chip will surpass the H100 chipset from Nvidia in terms of power. The report also adds that the Huawei 910D is more power-intensive and energy efficient as compared to Nvidia.

The move comes at a time when the US continues to tighten restrictions on semiconductor exports to China. Earlier this month, Nvidia's H20 chip, the most advanced processor the company could sell in China without a license, was added to the list of restricted semiconductors. This creates an opportunity for Chinese rivals like Huawei and Cambricon Technologies to gain ground in the domestic market.


Huawei on track with Ascend chipset manufacturingDespite facing manufacturing hurdles and being cut off from key global suppliers like Taiwan Semiconductor Manufacturing Company (TSMC) for advanced chip production, Huawei is reportedly on track to ship over 800,000 of its earlier Ascend 910B and 910C chips this year to major customers, including state-owned telecommunications companies and AI developers like ByteDance (TikTok's parent company). Sources also indicate increased interest in Huawei's 910C chips following recent US restrictions on Nvidia's H20.

While previous Huawei AI chips , including the 910C which was marketed as comparable to the H100, have reportedly fallen short of Nvidia's performance in real-world testing, the development of the 910D signifies China's continued determination to close the gap in the crucial AI chip sector.

Analysts suggest that while Chinese AI chips may currently lag behind Nvidia's top-tier offerings in individual performance and power efficiency, the ability to deploy them in large clusters could provide a competitive edge within China's domestic market, especially given Beijing's push for local AI developers to prioritize domestic chip procurement.


Here’s why was Huawei labeled as national security threat in the US

Huawei was banned in the US primarily due to national security concerns. The US government alleged that Huawei's close ties to the Chinese government and military posed risks, including potential espionage and unauthorised data access. These concerns were heightened by Huawei's role in developing telecommunications infrastructure, such as 5G networks, which could be exploited for surveillance.

Additionally, Huawei faced accusations of violating US sanctions by conducting business with Iran and engaging in intellectual property theft. In 2019, the US placed Huawei on its "Entity List," restricting American companies from doing business with Huawei without government approval.

In 2020, FCC also affirmed the designation of Huawei as a national security threat. In an order passed on June 30, 2020, FCC designated Huawei as well as its parents, affiliates, and subsidiaries, as posing a national security threat to the safety of communications networks and the communications supply chain. In the June order, the Commission’s Public Safety and Homeland Security Bureau formally designated Huawei as a covered company for purposes of the agency’s November 2019 ban on the use of support from the Commission’s Universal Service Fund to purchase equipment or services from companies posing a national security threat.