Huawei could benefit from Nvidia H20’s withdrawal from China’s AI chip market.
The U.S. continues to explore new strategies to hinder Huawei’s growth and the broader Chinese AI chip industry, but its latest move to curb Nvidia H20 sales in China might unexpectedly work in Huawei’s favor.
Under newly imposed AI chip regulations, Nvidia may no longer be able to sell its H20 processors in China. This decision, driven by the U.S. government’s aim to limit China’s access to advanced semiconductor technology, particularly affects companies linked to Huawei.
The intention behind these restrictions is to prevent Chinese firms from developing powerful AI chips. However, Nvidia’s potential exit from the Chinese AI chip market could give Huawei more room to expand its presence.
The H20 was designed specifically for the Chinese market, created to align with U.S. trade rules while fulfilling Nvidia’s revenue goals in China. Major Chinese tech firms such as ByteDance, Tencent, and Alibaba had adopted the H20 for cost-effective AI model training, even though it’s not the most efficient chip.
Despite its limitations, the H20 fulfilled the inference requirements of various AI applications. But with U.S. authorities now restricting its supply, citing concerns that it could be used in supercomputing and pose national security risks, Huawei may find a unique opportunity to strengthen its position in the AI chip race.
Huawei’s Advantage!
Chinese tech firms like ByteDance and other major Nvidia clients had placed large orders for the H20 chip. However, with new restrictions in place, these companies may now turn to Huawei for their AI needs.
Huawei has already been developing its own AI hardware, including the Ascend 910C chip, which reportedly delivers up to 60% of the inference performance of Nvidia’s H100. In addition, the company is said to be working on a next-gen chip — the Ascend 920 — which could outperform the H20.
If Nvidia’s H20 is indeed pulled from the Chinese market, Huawei could seize the opportunity to strengthen its presence in the AI sector — a move that could significantly reduce Nvidia’s dominance in the region.
