Huawei, a major Chinese tech player, is making waves in the AI chip market with its plans to challenge NVIDIA’s dominance. The company is rethinking its chip design strategy to capture a larger share of the domestic Chinese market, according to a recent report from The Information. Despite facing US sanctions that restrict NVIDIA from selling its advanced AI chips in China, NVIDIA’s products continue to be the most sought-after GPUs worldwide. 
So much so, that the Trump administration even considered imposing sanctions on Malaysia and Thailand to prevent China from accessing NVIDIA chips through these countries.
One key obstacle in Huawei’s pursuit of market share has been the lack of adoption of its CANN programming language. Reports indicate that CANN has not gained much traction in the market, a challenge Huawei is trying to overcome with a new chip software strategy. Huawei’s upcoming chips will feature software designed to enable compatibility with NVIDIA’s CUDA programming language. This software will act as an intermediary, converting CUDA instructions to a format compatible with Huawei’s chips.
Another significant shift Huawei is considering is expanding beyond its current focus on application-specific integrated circuits (ASICs). By moving towards a general-purpose computing model, similar to what NVIDIA and AMD use, Huawei could broaden the applications of its AI GPUs and potentially improve its market position in China. This change would help Huawei cater to a wider range of computing needs and attract a more diverse customer base.
However, designing the chips is just one hurdle. Huawei would need to collaborate with China’s SMIC for manufacturing. SMIC, which is already sanctioned by the US, can only manufacture chips with a 7-nanometer process, limiting its ability to produce advanced chips. While Huawei may be able to overcome the design equipment gap by relying on domestically produced machines, SMIC’s manufacturing constraints could pose a more significant challenge. Despite these hurdles, companies like Alibaba and Tencent may have no choice but to turn to Huawei’s products as they seek to match the performance of NVIDIA’s chips.