According to two sources familiar with the matter, Baidu ordered artificial intelligence (AI) chips from Huawei this year. This further indicates that U.S. pressure is prompting Chinese companies to accept Huawei’s products as replacements for Nvidia’s products.
Baidu is one of China’s leading AI companies, operating the Ernie large language model (LLM).
One of the sources said that Baidu placed the order in August, earlier than the widely expected implementation of new U.S. government regulations. The U.S. tightened restrictions on the export of chips and chip equipment to China in October, including products from U.S. AI chip giant Nvidia.
Sources said that Baidu ordered 1,600 Huawei Ascend 910B chips for 200 servers, adding that Huawei had delivered about 1,000 chips to Baidu as of October. The chip can serve as an alternative to the Nvidia A100 chip.
The second source said the total value of the order was about 450 million yuan ($61.83 million), and Huawei will deliver all the chips by the end of this year. Both declined to be named because the details of the transaction are confidential.
Although the order is insignificant compared to the thousands of chips that China’s top tech companies previously ordered from Nvidia, sources said the order is significant because it shows that some companies may switch from the U.S. company to other suppliers.
It is well known that Baidu, Tencent, and Alibaba are all long-term customers of Nvidia. Baidu was not previously known to be a customer of Huawei’s AI chips.
Although Huawei Ascend chips are still considered far inferior to Nvidia in terms of performance, the first source said they are the most advanced option in China.
The first source said: “They ordered the 910B chips to deal with the situation where they may not be able to buy chips from Nvidia in the future.”
Baidu and Huawei did not respond to requests for comment. Nvidia declined to comment.
Baidu has developed its own Kunlun AI chip, which it says supports large-scale AI computing, but the company mainly relies on Nvidia’s A100 chips to train its LLM.
After the U.S. issued regulations last year prohibiting Nvidia from selling A100 and H100 chips to China, the company released new A800 and H800 chips as replacements for supply to Chinese customers, including Baidu. Due to the tightening of U.S. regulations in October, Nvidia can no longer sell these chips to China.
Analysts predicted last month that U.S. restrictions would create opportunities for Huawei to expand in its $7 billion domestic market. The company has been subject to U.S. export controls since 2019.
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