Nvidia Faces New Challenge As Huawei Tests Powerful Ascend 910D AI Chip Amid US Sanctions, Aiming To Disrupt High-End Market: Report

Huawei Technologies is reportedly preparing to test its most powerful artificial intelligence processor to date, with hopes of replacing high-end chips from U.S. giant Nvidia Corporation (NASDAQ:MSFT), even as U.S. sanctions continue to stifle China’s semiconductor ambitions.

What Happened: Huawei has begun the testing phase of its new AI chip, the Ascend 910D, which is designed to rival Nvidia's flagship processors, reported the Wall Street Journal on Sunday, citing people familiar with the matter.

The chip will undergo a series of technical tests, with samples expected to be ready by late May. The Ascend 910D aims to surpass Nvidia's H100 chip, a popular choice for AI training tasks.

This move marks a significant step forward for Huawei's semiconductor division, which has faced substantial challenges due to U.S. sanctions over the past six years.

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This year, Huawei plans to ship over 800,000 Ascend 910B and 910C chips. Customers include state-run telecoms and companies like ByteDance, the report noted, citing the sources. 

However, Huawei has been struggling to manufacture these chips on a large scale due to obstacles in its supply chain. The company has been excluded from working with Taiwan Semiconductor Manufacturing Co. (NYSE:TSM).

Its closest alternative, Semiconductor Manufacturing International, is also restricted from acquiring the latest chip-making technology.

Why It’s Important: Earlier this month, the U.S. government placed Nvidia's H20 chip—its most advanced processor available for sale in China without a license—on a list of semiconductors facing sales restrictions.

Nvidia revealed that this move would lead to a $5.5 billion financial hit.

On Sunday, Chamath Palihapitiya spoke about how Huawei has effectively executed a “low-end disruptor” strategy. This strategy focuses on creating products that match or exceed the quality of industry leaders, but at a more affordable price.

He highlighted several companies Huawei has already surpassed, including Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) and Nokia (NYSE:NOK).

Previously, the SPAC king raised concerns that Nvidia may not be prioritizing the best interests of the U.S.

Benzinga Edge Stock Rankings places Nvidia’s growth score in the 94th percentile. Curious how other chip stocks compare? Click here to discover more.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.