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Exclusive: Baidu placed an order for AI chips from Huawei rather than Nvidia


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 prompting China to accept the project. company’s products as an alternative to those of Nvidia.

One of the sources said Baidu, one of China’s leading AI companies, which operates the Ernie Extended Language Model (LLM), placed the order in August, ahead of widely anticipated new US government rules that tightened restrictions on chip exports in October. and chip tools to China, including those from U.S. chip giant Nvidia (NVDA.O).

Baidu ordered 1,600 Huawei Technologies 910B Ascend AI chips – which the Chinese company developed as an alternative to Nvidia’s A100 chip – for 200 servers, the source said, adding that as of October, Huawei had delivered more than 60%. of the order, or around 1,000 tokens, to Baidu.

The second person said the total order value was around 450 million yuan ($61.83 million) and Huawei was expected to deliver all the chips by the end of this year. Both people 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 tech companies have historically ordered from Nvidia, the sources said it was significant because it showed how some companies could move away from the U.S. company.

Baidu, alongside its Chinese peers such as Tencent (0700.HK) and Alibaba (9988.HK), is known to be a long-time customer of Nvidia. Baidu was not previously known to be a customer of Huawei’s AI chips.

Although Huawei’s Ascend chips are still considered far inferior to Nvidia’s in terms of performance, the first source said it is the most sophisticated domestic option available in China.

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

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

The Baidu sign is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 6, 2023. REUTERS/Aly Song/File photo acquire license rights

Huawei’s website says it has been collaborating with Baidu since 2020 to make its AI platform compatible with Huawei hardware. In August, the two companies announced that they would strengthen compatibility between Baidu’s Ernie AI model and Huawei’s Ascend chips.

Baidu has developed its own line of Kunlun AI chips, which the company says support large-scale AI computing, but the company has primarily relied on Nvidia’s A100 chip to form its LLM.

After the United States imposed rules last year preventing Nvidia from selling its A100 and H100 chips to China, the company launched new A800 and H800 chips as alternatives to 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 U.S. restrictions would create an opening for Huawei to expand into its $7 billion domestic market. The company has been subject to U.S. export controls since 2019.

The order adds to signs of technological advances for Huawei, as Beijing invests in its domestic semiconductor industry to help it catch up with foreign peers and urges state-owned companies to replace foreign technology with domestic alternatives.

Huawei attracted global attention in August when it unexpectedly unveiled a new smartphone that analysts say uses in-house developed processors with advanced semiconductor technology, highlighting advances in technology. company 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 Ye in Hong Kong; Editing by Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.

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