Huawei Technologies is on the verge of launching a new AI chip, the Ascend 910C, which is expected to challenge the US competitor Nvidia in the Chinese market. Despite ongoing US sanctions that have significantly hampered Huawei's chip production, Chinese internet and telecommunications companies like ByteDance and Baidu tested the new processor in recent weeks.

The Ascend 910C is described by Huawei as comparable to Nvidia's H100 chip, which has not been directly shipped to China since its launch last year. However, the production of the chip could be delayed by potential further US restrictions and ongoing manufacturing issues. Huawei plans to start shipping the chip from October, though the final orders and delivery schedule may still vary.

The introduction of the Ascend 910C marks an important step for Huawei, which has been on the US sanctions list since 2019 and is therefore classified as a national security threat. This classification has cut off Huawei from access to critical components and manufacturing facilities, such as those in Taiwan. Nevertheless, Huawei remains a key player in China's efforts to replace American technologies, thanks to billions in state support.

The demand for the new chip could exceed 70,000 units and reach a total value of around two billion US dollars. In light of the ongoing US sanctions, Huawei is also stockpiling components and high-speed memory chips to mitigate future production bottlenecks.

While Nvidia continues to offer less powerful variants of its chips for the Chinese market, Huawei could gain a significant market share in China by introducing the 910C. Experts estimate that Huawei could produce between 1.3 and 1.4 million of these chips next year, provided no additional US sanctions are imposed.