Huawei takes on Nvidia with new AI chip: Report

Huawei is looking to take on Nvidia (NVDA) with a new AI chip. Huawei has been testing a chip similar to Nvidia’s H100 AI chip, according to a report from The Wall Street Journal. However, the report also states that Huawei is suffering from production issues.

Morning Brief anchors Brad Smith and Seana Smith discuss the report in the video above.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Stephanie Mikulich.

Video Transcript

Well.

China's Huawei is challenging NVIDIA with a new chip for artificial intelligence.

According to The Wall Street Journal, Huawei has reportedly told potential clients that the chip is comparable to NVIDIA's H 100.

And there you're taking a look at some of the chip maker activity early out of the gate here this morning.

NVIDIA, uh, kind of shrugging off some of those potential competitive landscape pressures that they could face from Huawei.

Of course, what's important to note for Huawei is that they are also one of the major manufacturers of the top performing smartphone and handsets in the world.

And so with that in mind, they would have less of a need or reliance on some of the fabrication process and chip design process of the likes of an NVIDIA or their current, uh, O EMS that are servicing them.

As of right now, yeah, so So the reports say that this is comparable to NVIDIA's H 100 chip, and the reason why that is important is because that is the chip that is banned in China because of restrictions because of questions about national security.

So NVIDIA had made chips that weren't strong as the H 100 here in the hopes of selling them to China.

So the thought I think here to some of the pressure that we could see on NVIDIA, is if Huawei is able to manufacture this chip that is as strong as the H 100 or is as advanced as the H 100 chip, then that, of course, could dampen some of the demand that we could see from NVIDIA chips that aren't as advanced.

So I think that's some of the maybe things that investors need to keep in mind here, as we as we think about what NVIDIA's business could look like in China.

Obviously, this is nothing new when we talk about the crackdown that we have seen from the Biden administration on the export of advanced chips.

They have been very vocal just about the national security issues and things like that, and have cracked down uh, very much NVIDIA, far from the only chip maker caught caught in the crosshairs of this.

But again, the reports here that Huawei could be shipping this chip as early as October.

Then, of course, the question is, what kind of pressure could this actually put on demand for NVIDIA's less advanced chips in the region?

So we shall see