Huawei’s AI chip sales surge as Nvidia stalls in China

{"text":[[{"start":7.35,"text":"Huawei is set to capture the largest share of China’s AI chip market this year, with sales jumping by at least 60 per cent amid strong demand from Chinese companies seeking domestic alternatives to Nvidia."}],[{"start":20.2,"text":"China’s tech groups have placed large orders for Huawei’s latest Ascend processor 950PR, according to two people with knowledge of the matter, as the Shenzhen-based company races to make inroads into a sector long dominated by the $5.1tn US chip group."}],[{"start":37.45,"text":"Huawei expects revenues from its AI chips to reach about $12bn this year based on orders it has already received, up from $7.5bn in 2025. The majority of orders this year are for 950PR, which entered mass production in March. It also plans to launch an upgraded version of 950DT in the fourth quarter, the people said."}],[{"start":62,"text":"The Chinese tech group has aggressively expanded its chipmaking capabilities as Nvidia continues to face regulatory barriers in Washington and Beijing."}],[{"start":70.85,"text":"While Nvidia chief Jensen Huang said in March the company had finally received US licences to sell its H200 chips to China, no shipments have yet been made due to regulatory issues, according to two people with knowledge of the matter."}],[{"start":null,"text":"

"}],[{"start":86.55,"text":"Beijing has told Chinese tech companies to support domestic producers and limit their use of Nvidia chips to overseas, one of the people said. Meanwhile US regulators require that all Nvidia chips ordered by Chinese clients only be used in China, according to the person. This has led to no customs clearance for H200 in China, which is required for shipments."}],[{"start":108.9,"text":"Huawei’s AI chip revenue forecast could rise if its production ramp-up exceeds projections, the people said."}],[{"start":116.25,"text":"The Chinese tech group manufactures most of its AI chips with Semiconductor Manufacturing International Corporation (SMIC), China’s leading fab. Later this year two additional fabrication plants dedicated to its needs are scheduled to launch."}],[{"start":129.85,"text":"While Huawei’s latest chips still lag Nvidia’s most advanced products by at least two generations, the Chinese company has steadily improved the performance and efficiency of its AI chips. "}],[{"start":141.95,"text":"The Chinese tech group has positioned its latest 950PR processors as the hardware of choice for domestic companies running “inference”, the computation LLMs use to generate responses. "}],[{"start":155.6,"text":"Huawei is betting that inference, which is technically less challenging than model training, will be a bigger future source of demand as AI applications such as agents become more widespread."}],[{"start":167.29999999999998,"text":"The tech group is also leveraging its networking capability to build powerful computing clusters, offsetting weaker single-chip performance."}],[{"start":null,"text":""}],[{"start":175.35,"text":"Earlier this month DeepSeek said it worked with Huawei’s 950PR for its latest V4 model, which features improved inference efficiency at reduced costs. But the majority of V4’s training was still done on Nvidia’s chips, according to people familiar with the matter. "}],[{"start":191.29999999999998,"text":"“The day that DeepSeek comes out on Huawei first, that is a horrible outcome for our nation,” Nvidia’s Huang said in a recent interview with podcaster Dwarkesh Patel. It could lead to a scenario where “AI models around the world are developed and they run best on non-American hardware”, he added. "}],[{"start":210.2,"text":"A key challenge for Nvidia’s Chinese competitors has been building a software system to rival the US chipmaker’s Cuda, which remains dominant globally. "}],[{"start":220.39999999999998,"text":"Huawei’s Cann, started a decade after Cuda, has drawn complaints for being difficult to use, which greatly increases clients’ operating costs. While improvements are being made, its disadvantage compared to Nvidia’s Cuda remains significant, developers say. "}],[{"start":237.39999999999998,"text":"Morgan Stanley forecasts China’s AI chip market will reach $67bn in 2030, with 86 per cent expected to be supplied by Chinese players. It estimates the market to be about $21bn this year from domestic suppliers. "}],[{"start":252.79999999999998,"text":"China’s AI chip sector was previously dominated by Nvidia, which sold $17.1bn in fiscal year 2025, mostly from H20, a watered-down product tailored for China to meet US export controls."}],[{"start":267.7,"text":"Since the US banned the sales of the H20 to China a year ago, Nvidia has struggled to re-enter the market with another AI chip that would satisfy both US and Chinese regulators’ concerns."}],[{"start":279.75,"text":"“Two structural forces shape the market: a rapid rise in AI inference demand . . . and persistent export controls, making localization a long-duration feature of China’s AI compute market rather than a temporary policy response,” wrote Morgan Stanley analysts. "}],[{"start":297.25,"text":"Huawei did not respond to a request for comment. Nvidia declined to comment."}],[{"start":302.3,"text":"With additional reporting from Cheng Leng in Beijing and Demetri Sevastopulo in Washington"}],[{"start":314.8,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1777599931_5645.mp3"}