Huawei’s new AI chip finds favour with ByteDance, Alibaba which plan to place orders, Reuters sources say

A customer carries his purchased Huawei product outside a Huawei store after he attended the Huawei new product launch conference in Beijing, on Sept. 25, 2023. (AP Photo/Andy Wong)

Customer testing of Huawei’s new AI chip, designed to challenge Nvidia in the China market, has gone well and big tech giants including ByteDance and Alibaba plan to place orders, two people familiar with the matter said.

The development marks a milestone for Huawei.

Despite a government campaign to encourage the use of domestic semiconductors, the Shenzhen-based firm struggled to persuade big tech firms in the private sector to adopt its current flagship chip, the Ascend 910C, in large quantities, industry sources have previously said.

This time around, tech firms intend to use the new 950PR more extensively, much happier now that the chip is more compatible with Nvidia’s CUDA software system and has better response speeds, said the two people and a third person with knowledge of those plans.

Huawei plans to ship around 750,000 950PRs this year, according to two of the people. They said samples were sent to customers in January, and that mass production should begin next month, setting the stage for fully fledged shipments to start in the second half of the year.

The sources were not authorized to speak to media and declined to be identified. Huawei, ByteDance, Alibaba 9988.HK did not reply to Reuters requests for comments.

Restrictions on Nvidia chips

A launch of the 950PR comes at a difficult time for Nvidia in China. Many of its artificial intelligence chips have been banned from sale in China by Washington on worries that the technology could boost the capabilities of the Chinese military.

The Trump administration last year greenlighted the sale of Nvidia’s H200 chips - more powerful than currently restricted products - albeit with a number of conditions that could limit amounts sold.

The H200 has also recently received approval from Chinese authorities, but it remains unclear when they will be allowed into the country.

Huawei mentioned its new chip last September when it outlined its long-term semiconductor plans for the first time and said it would be launching some of the world’s most powerful computing systems.

The 950PR, which uses traditional DDR memory, will be priced at around 50,000 yuan (US$6,900) per card, while a premium version with faster HBM memory will sell for around 70,000 yuan, the sources said.

Where previously Huawei had stuck to its proprietary CANN software system, the new chips will allow developers at Chinese tech firms, which have generally used Nvidia’s software system thus far, to migrate those models more easily.

The sources said that compared to the 910C, the chip only offers a small improvement in raw computing power, but it is designed to excel in handling inference workloads - the process of running trained AI models to answer queries or execute tasks.

Demand for AI inference computing in China is surging as the country’s tech sector shifts its focus from model development to real-world deployment, a trend turbocharged by the rapid adoption of open-source AI agent OpenClaw.

Reporting by Reuters staff; Editing by Miyoung Kim and Edwina Gibbs, Reuters