Chip stocks suffer as Nvidia struggles in face of Huawei competition and Tech Giants unveil weekly earnings results
Nvidia's (NVDA) stock took a hit on Monday, with the tech giant facing stiff competition from Huawei Technologies in the high-end AI chip market. Huawei is reportedly testing its most powerful AI processor, the Ascend 910D, aiming for performance that outstrips Nvidia's H100 [1].
Meanwhile, the benchmark S&P 500, and the tech-focused Nasdaq are maintaining their ground.
US-China trade restrictions have limited Nvidia's ability to supply advanced chips like the H20 to Chinese buyers, creating an opportunity for Huawei [1]. The Chinese tech giant plans to ship over 800,000 Ascend 910B/C chips to clients like ByteDance and state telecom firms, signaling scaled production capabilities that could put pressure on Nvidia’s dominance [1].
Huawei asserts that the Ascend 910D will surpass Nvidia's H100, though independent benchmarks are yet to be conducted [1]. Instead of solely boosting individual chip power, Huawei is focusing on clustered efficiency, offering cost-effective solutions for AI developers [1].
The competition could drive faster innovation cycles in AI hardware globally, particularly as Beijing encourages domestic chip adoption, making Huawei a national champion and reducing reliance on foreign suppliers like Nvidia [1]. US restrictions on high-bandwidth memory exports to China could hinder both companies, but Huawei’s vertically integrated ecosystem may mitigate these risks better than Nvidia’s global model [1].
Nvidia now faces challenges, with trade restrictions leading to $5.5B in projected charges tied to AI chip inventory, reflecting reduced access to China’s market [1]. The company must innovate faster or risk ceding ground to Huawei in China.
- Huawei is looking to challenge Nvidia's dominance in the high-end AI chip market with its Ascend 910D, which is said to outperform Nvidia's H100.
- In response to Huawei's advancements, Nvidia may have to accelerate its innovation cycles to maintain its position in China's AI chip market.
- The technology industry is witnessing increased competition as Huawei's strong offerings, such as the Ascend 910D, pose a threat to Nvidia in the AI chip sector.
- As Huawei scales up production of the Ascend 910B/C chips, it could put pressure on Nvidia's dominance in the global AI chip market, particularly in China.
