China directs local firms to buy Huawei AI chips over Nvidia H20: Report

China is now pressuring its companies to purchase Huawei and other local AI chips instead of Nvidia H20. The Chinese authorities are taking this measure to counter the tough U.S. trade restrictions and support the native semiconductor industry.

As noted by Bloomberg, Chinese regulators directed local firms and enterprise customers to prohibit Nvidia H20 usage. The H20 is a China-specific chip. It’s a special but low-end version of the Nvidia H800. The chip is used to train AI models.

Following the U.S. ban, Chinese companies relied on Nvidia’s chipsets for AI models and other related technologies. However, China now aims to support its native techs and firms over U.S. products, increasing its self-reliance and economic growth.

Inputs reveal that Chinese regulators like the Ministry of Industry and Information Technology issued a set of new rules under ‘window guidance’. It encourages the firms to switch to local chipmakers and reduce the Nvidia use as far as possible.

Huawei and Cambricon are currently the top AI chipmakers in China. A direct prohibition of Nvidia chips in the region will ultimately help the native chip producers to increase their market share. The aim is to support native AI startups over foreign firms.

People related to the matter say that it’s not possible to completely ban Nvidia chips in the region. Many companies are looking to develop the best AI system which requires foreign processors instead of local options. But the condition is that the Nvidia chips’ usage should be minimal.

Another input notes that Nvidia shares fell to 3.9% ($119.26) by Friday. When asked to the CEO of Nvidia – Jensen Huang about the entire matter, he said:

“The first thing we have to do is comply with whatever policies and regulations that are being imposed. And, meanwhile, do the best we can to compete in the markets that we serve. We have a lot of customers there that depend on us, and we’ll do our best to support them.”

While Chinese chipmakers are readying alternatives to Nvidia’s chips, local companies are stockpiling foreign chips before the U.S. export controls reach a new level. For instance, ByteDance ordered 200000+ Nvidia H20 chips this year worth $2 billion.

Huawei, on the other hand, is also taking major steps in this matter. After months of internal testing, the company is now sending its Ascend 910C AI chip samples to top tech firms, expanding its strength in the AI chip sector. Read More…

It would be worth seeing how the next-gen Huawei AI chips will counterattack Nvidia H20 processors.

(Source)