Chinese Firms Develop AI Chips to Rival NVIDIA Under US Sanctions
Huawei and Cambricon’s chips match 60-80% of NVIDIA’s performance as Beijing accelerates domestic AI semiconductor adoption
On the 26th, local time, the U.S. IT media outlet The Information reported that Chinese regulators have blocked ByteDance, the parent company of TikTok, from using NVIDIA chips in its data centers. Instead, the authorities have mandated the use of AI chips developed by Chinese companies Huawei and Cambricon. Also on the 5th, the Chinese government announced guidelines requiring state-funded new AI data centers to use only domestically produced AI chips. This effectively aims to phase out NVIDIA GPUs in China and promote the adoption of homegrown AI semiconductors.
China has emerged as the most aggressive player in reducing reliance on NVIDIA. Paradoxically, this shift was spurred by the U.S. government, which restricted exports of NVIDIA’s latest GPUs to China under the pretext of curbing its technological rise. Initially, only lower-performance GPUs were sold to China, but even these were recently subject to tighter controls. With AI semiconductor imports blocked, China has poured massive subsidies into domestic companies to accelerate local AI chip development. The government has even introduced electricity cost support programs.
After years of trial and error, Chinese firms are now achieving partial success in replacing NVIDIA. Huawei developed the Ascend 910C in October of last year, which delivers approximately 60% of the performance of NVIDIA’s H100 AI chip. By bundling 384 units of this chip, Huawei matched the performance of NVIDIA’s latest offering, compensating for lower individual performance with scale. In September of this year, Huawei announced plans to release three new AI chip products by 2028.
Cambricon, a Chinese AI startup, earned the nickname “China’s NVIDIA” after developing the MLU 590, which achieves 80% of the performance of NVIDIA’s A100 AI chip. Its chips are now supplied to Chinese companies like ByteDance. Goldman Sachs projected that Cambricon’s AI chip shipments will grow from approximately 143,000 units in 2025 to 2.1 million units in 2030. Chinese tech giants Alibaba and Baidu are also training AI models using their own chips, including the Tianyuan and Kunlun P800, respectively.
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Chinese Firms Develop AI Chips to Rival NVIDIA Under US Sanctions, source
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