EXCLUSIVE: Baidu orders AI chip from Huawei in close proximity to Nvidia

A Baidu billboard is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China on July 6, 2023. Reuters/i Song/File photo rights obtained

BEIJING/SHANGHAI, Nov 7 (Reuters) – Baidu ( 9888.HK ) ordered artificial intelligence chips from Huawei ( HWT.UL ) this year, two people familiar with the matter said, adding to signs that U.S. pressure is driving Chinese acceptance. This is the issue. The company’s products as an alternative to Nvidia.

Baidu, one of China’s leading artificial intelligence companies, which operates Ernie’s Large Language Model (LLM), placed the order in August, ahead of anticipated new rules by the U.S. government that would limit chip exports in October, one of the people said. aggravated, recorded. and chip tools to China, including tools from U.S. chip giant Nvidia ( NVDA.O ).

Baidu ordered 1,600 of Huawei Technologies’ 910B Ascend AI chips — developed by the Chinese company as a replacement for Nvidia’s A100 chip — for 200 servers, the source said, adding that by October, Huawei had delivered 60 percent more of the order. have given. 1000 chips, to Baidu.

The total value of the order is approximately 450 million yuan ($61.83 million), and Huawei is expected to deliver all the chips by the end of this year, the second person said. Both declined to be named because details of the deal were confidential.

Although the order is small compared to the thousands of chips that major Chinese technology companies have ordered from Nvidia over the years, the sources said the order is significant because it shows how some companies can move away from the American company.

Baidu, along with Chinese peers such as Tencent ( 0700.HK ) and Alibaba ( 9988.HK ), is known as a long-time customer of Nvidia. Baidu was not previously known as Huawei’s AI chip customer.

Although Huawei’s Ascend chips are still far below Nvidia’s in terms of performance, the first source said they are the most sophisticated domestic option available in China.

“They were ordering the 910B chips to prepare for a future where they may no longer be able to buy from Nvidia,” the first source said.

Baidu and Huawei did not respond to requests for comment. Nvidia declined to comment.

Huawei’s website says it has been working with Baidu since 2020 to adapt its AI platform to Huawei hardware. In August, the two companies announced that they would deepen compatibility between Baidus Ernie AI model and Huaweis Ascend chips.

Baidu has developed its own line of Kunlun AI chips, which the company says supports large-scale AI computing, but the company mainly relies on Nvidia’s A100 chip for its LLM training.

After the US imposed rules last year that barred Nvidia from selling its A100 and H100 chips to China, the company released the new A800 and H800 chips as replacements for Chinese customers including Baidu. Nvidia is no longer able to sell these chips to China due to the October rules.

HUAWEI OPPORTUNITY

Analysts predicted last month that the U.S. restrictions would create an opportunity for Huawei to expand in its $7 billion domestic market. The company has been under US export control since 2019.

The order adds to signs of technological breakthroughs for Huawei as Beijing ramps up investments in its domestic semiconductor industry to help it catch up with overseas peers and urges state-owned companies to replace foreign technologies with domestic alternatives. do

Huawei grabbed global attention in August with the surprise unveiling of a new smartphone that analysts say uses home-grown processors with advanced semiconductor technology, highlighting the company’s progress in chip development despite sanctions.

In September, Reuters reported that Huawei’s in-house chip design unit, HiSilicon, had started shipping new Chinese-made processors for surveillance cameras to customers in 2023 in another sign of a comeback.

($1 = 7.2782 Chinese Yuan Renminbi)

Reporting by Yelin Mo, Zhang Yan and Brenda Goh. Additional reporting by Josh Yeh in Hong Kong. Edited by Gary Doyle

Our Standards: The Thomson Reuters Trust Principles.

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