Xi Jinping's government has begun recommending that Chinese technology companies stop purchasing NVIDIA integrated circuits, specifically those designed for artificial intelligence (AI). As reported by the South China Morning Post, the step taken by the Chinese government is, for now, informative. It is aimed mainly at companies that use GPUs for AI, suggesting that they opt for products made in China instead of those of the company led by Jensen Huang or other foreign ones.
The U.S.-imposed sanctions prohibit NVIDIA from selling its most advanced AI chips, such as the A100 and H100, to Chinese companies. As a result, the company has had to modify its GPUs to comply with U.S. Commerce Department regulations. Even so, NVIDIA has permission from Joe Biden's administration to market the H20 GPU in China and expects to deliver more than one million units before the end of the year.
Despite these adaptations, NVIDIA is losing competitiveness in the Chinese market. The H20 GPU is considerably less powerful than the company's most advanced chips. In addition, as of August 2024, China's Ministry of Industry and Information Technology has begun to restrict the purchase of these chips, although it has not yet made the measure official.
Chinese alternatives
AI hardware development in China is advancing rapidly, with many companies working on their solutions. MetaX, Alibaba, Biren Technology, Moore Threads, Innosilicon, Zhaoxin, Iluvatar CoreX, DenglinAI, and Vast AI Tech are among the most prominent companies. However, one that shines the brightest is Huawei, which turns over approximately $7 billion annually in China alone.
Huawei has been developing its AI GPU, Ascend AI, for over five years. During this time, the company refined these GPUs, bringing them closer to the performance of NVIDIA's A100 and H100 chips.
Most AI projects inside and outside China are based on CUDA, NVIDIA's technology that combines the development tools needed to program on its GPUs. Huawei has developed its alternative, CANN (Compute Architecture for Neural Networks). However, analysts agree that it is still far from reaching the platform's capabilities founded by Huang.
This is the approach the company is taking. Huawei has introduced the Ascend 910C GPU, an improved version of its previous model, the Ascend 910B. According to Huawei, the 910B was already comparable in power to NVIDIA's A100, suggesting that the new 910C could be even more powerful.