The battle for supremacy in artificial intelligence chips is more than just a business rivalry between two global technology giants. The winner has the potential to shape the technological landscape for years to come, influencing everything from consumer electronics to autonomous vehicles. The rivalry also offers a glimpse into China’s growing strength in chip design as it seeks to establish itself as an independent technology powerhouse.
In a late Wednesday filing with the Securities and Exchange Commission, Nvidia identified China’s Huawei as a top competitor in several categories, including artificial intelligence chips. The Santa Clara, California-based company said that Huawei competes in supplying chips designed for AI, such as graphics processing units (GPUs), central processing units (CPUs), and networking chips. It has also emerged as a cloud service company designing its hardware and software to improve AI computing.
Last year, Huawei surprised the world by launching the Mate 60 Pro, a cutting-edge phone powered by advanced chips. It was a sign that the Shenzhen-based firm had made significant strides in its chip development, especially as it grappled with U.S. restrictions that blocked it from exporting some of the most advanced semiconductors.
Nvidia’s latest AI chips directly respond to the Chinese tech giant’s efforts to catch up in this vital technology area. The new processors are designed to deliver up to seven times more performance per watt than Nvidia’s previous chips. They aim to give customers greater flexibility in using AI systems in their operations.
The announcement prompted Nvidia shares to rise 14% in early afternoon trading on Thursday, fueled by a revenue forecast that exceeded estimates and continued strong demand for the company’s products. In a conference call with investors, CEO Jensen Huang said the demand for Nvidia’s newest AI chips would continue to outpace supply for the rest of the year.
While Nvidia’s latest chips boost the company’s sales, China remains a significant challenge. The US-China trade war has impacted Nvidia’s ability to sell its products in the country, and the company is expected to face further obstacles as it works to comply with trade rules.
In a separate filing on Thursday, Nvidia disclosed that it had received letters from the Treasury Department seeking to block its access to some of its bank accounts and other financial assets. The company has requested that the Treasury Department grant it temporary relief from those requirements to ensure it can keep operating.
Nvidia’s announcement comes less than a week after it filed for a $2.3 billion mixed-shelf offering of common stock, preferred stock, and warrants to purchase company shares. Goldman Sachs and Morgan Stanley are joint book-running managers for the offering.
