Nvidia Stock Falls Nearly 5% After China Strikes Back in the AI War

Quick overview

Huawei is preparing a new artificial intelligence chip for mass shipments, while the Asian giant seeks alternatives to replace Nvidia—all amid the trade war.

Huawei Technologies is preparing to begin mass shipments of its advanced 910C AI chip to Chinese customers starting next month, according to two people familiar with the matter. Some shipments have already been made, they added.

The timing is favorable for Chinese AI firms, which have been forced to seek domestic alternatives to Nvidia’s H20—the company’s leading AI chip that, until recently, could be sold freely in China. As a result of mounting geopolitical pressure, Nvidia (NVDA.O), a key component of the S&P 500, has seen its stock drop nearly 6%.

Earlier this month, the administration of President Donald Trump informed Nvidia that future H20 sales to China would require an export license, tightening restrictions on advanced semiconductor exports.

Huawei’s new chip, the 910C GPU, is described by insiders not as a technological breakthrough, but as an architectural evolution. By integrating two of its previous 910B processors into a single package using advanced chip-stacking techniques, Huawei has reportedly achieved performance comparable to Nvidia’s H100. The 910C offers double the computing power and memory of the 910B, along with enhanced support for various AI workloads.

Washington’s aim to curb China’s technological rise—particularly in areas with military applications—has led to strict export controls on Nvidia’s most advanced products, including its flagship B200 chip. The H100 was banned in China back in 2022, even before its official release.

Huawei Rises Amid U.S. Restrictions

This increasingly restrictive environment has opened the door for Huawei and other Chinese GPU startups, such as Moore Threads and Iluvatar CoreX, to enter a market long dominated by Nvidia.

With the U.S. Department of Commerce imposing new restrictions on Nvidia’s H20, Huawei’s Ascend 910C is now poised to become the preferred hardware for Chinese AI developers, particularly for inference-related tasks.

Sources say that by the end of last year, Huawei had already distributed samples of the 910C to several tech firms and begun accepting orders. However, Reuters could not confirm which companies are primarily responsible for producing the chip.

Some of the 910C’s core components are being manufactured by Chinese foundry SMIC (0981.HK) using its 7nm N+2 process technology—though with reportedly low production yields.

At least a portion of the 910C GPUs also use semiconductors made by Taiwan’s TSMC (2330.TW) for the Chinese firm Sophgo, according to one of the sources and a fourth person. The U.S. Department of Commerce is currently investigating TSMC’s work for Sophgo, after a chip made by the Taiwanese firm was found in a 910B processor.

According to the RAND Corporation’s Center for Security and Emerging Technology, TSMC has produced close to 3 million chips in recent years that match Sophgo’s design—an indication of how deeply intertwined global semiconductor supply chains remain, even amid rising trade tensions.

ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

Related Articles

Comments

0 0 votes

Article Rating

Subscribe

Login

Notify of

new follow-up commentsnew replies to my comments

Please login to comment

0 Comments

Oldest

Newest Most Voted

Inline Feedbacks

View all comments