Nvidia has in its latest annual report identified Huawei as a major competitor in several markets, such as AI chips, cloud computing, computing processing, and networking products. This is occurring despite the current U.S. sanctions that limit Huawei's access to cutting-edge technologies.
Nvidia Identifies Huawei as a Major Competitor
For the first time in history, Nvidia's yearly report to the U.S. Securities and Exchange Commission (SEC) includes Huawei as one of its top competitors. This reference points to the growing strength of Huawei in the AI and semiconductor industries.
Nvidia CEO Jensen Huang did acknowledge the intensifying competition, stating:
"Huawei, other companies, are. quite vigorous and very, very competitive."
(Business Insider)
Huawei's AI, semiconductor manufacturing, and cloud computing research have made it a credible player even with U.S. sanctions restricting its access to key American technologies.
Huawei's Breakthrough in AI Chip Development
Huawei has made substantial progress in the production of AI chips, particularly its Ascend series. Huawei has doubled the yield of its cutting-edge AI chips to up to 40%, aiming for industry benchmarks of 60%.
This has helped Huawei's AI chip-manufacturing production line break even, assisting China's overall plan to become technologically independent in the long term.
(Financial Times)
Impact of U.S. Sanctions and Huawei’s Revenue Growth
Since 2019, Huawei has faced strict U.S. trade restrictions that have blocked access to American technology, from advanced 5G chips to Google’s Android operating system.
However, Huawei has demonstrated remarkable resilience, reporting a 22% revenue increase in 2024, reaching 860 billion yuan (approximately $118.27 billion). This marks its fastest growth in four years, driven by a resurgence in its consumer electronics business and strategic investments in AI and cloud computing.
(Reuters)
Huawei’s Return to the Smartphone Market
After years of setbacks, Huawei bounced back into the smartphone arena in 2023 with the launch of its Mate 60 Pro in China. The device was praised for delivering 5G-level download speeds, despite having been banned from purchasing state-of-the-art 5G chips.
Building on this momentum, Huawei introduced the Mate 70 series in 2024, featuring HarmonyOS NEXT, the company’s first fully self-developed operating system. This marked a significant step toward reducing reliance on U.S. software and solidified Huawei’s renewed strength in the mobile industry.
(South China Morning Post)
China’s Push for AI Dominance
China is investing aggressively in its ecosystem of AI technology, hiring tech giants and start-ups to construct state-supported AI data centers. By mid-2024, the country had completed or initiated over 250 AI data centers, funded heavily by government-backed investments.
It is being achieved to satisfy growing demand for AI infrastructure, optimize chip performance, and position China as a global leader in the development of AI.
(Financial Times)
Chinese AI Startups on the Rise
As for Huawei, Chinese AI startups are proving to be strong contenders in the global marketplace. DeepSeek, a new AI startup, made a splash by developing AI models intended for GPU performance at significantly lower costs.
These developments disprove the thesis that the U.S. enjoys strong dominance in AI R&D.
(Financial Times)
Nvidia Stance on U.S. Export Controls
Nvidia CEO Jensen Huang has lamented the impact of U.S. export controls on China's AI development. The U.S. government strengthened the controls in 2023, cutting Nvidia's China revenue from 21% to 13% over two years.
Huang acknowledged that while export controls might limit China’s access to cutting-edge Nvidia chips, they have also prompted Chinese companies to develop their own alternatives, reducing reliance on U.S. technology.
(Business Insider)
Huawei’s Leadership in China’s Foldable Smartphone Market
Huawei is now the leader in China’s foldable smartphone market, holding a 51.29% market share. The company’s Mate X5 and Pocket 2 models accounted for nearly 40% of total foldable smartphone sales, reinforcing Huawei’s dominance in this rapidly growing segment.
(DigiTimes)
Final Thoughts
Nvidia's acknowledgement of Huawei as one of its biggest competitors is indicative of the shift in global dynamics of the semiconductor and AI industry. Although hit by American sanctions, Huawei has shown amazing strength, with a record high of revenue growth and making phenomenal advancements in AI, chip production, and smartphone tech.
As the battle between Nvidia and Huawei intensifies, the future of technology will witness faster development, increased geopolitics, and a reshuffled power balance of AI and semiconductors.
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