Published on November 9, 2023, 7:11 am

Chinese tech giant Baidu has responded to the US export ban by placing an order for AI chips from Huawei, according to Reuters. This move comes as a result of the US restrictions on chip exports to China that went into effect in October, affecting products from Nvidia. Baidu reportedly ordered 1,600 Huawei 910B Ascend AI chips, which are considered the most advanced domestic option in China. The order is worth approximately $61.83 million and is expected to be delivered by the end of the year.

The decision to turn to Huawei for AI chips was driven by concerns that Baidu may no longer be able to purchase from Nvidia in the future due to ongoing geopolitical tensions between the US and China. This move highlights a potential shift away from US companies by Chinese firms, albeit reluctantly.

Although the current order is relatively small compared to what Chinese tech companies typically purchase from Nvidia, it signals a potential change in procurement strategies. In response to previous regulations banning Nvidia’s A100 and H100 chips sales in China, Nvidia introduced alternative options specifically designed for Chinese customers – the A800 and H800 chips. However, with the new regulations implemented in October, even these alternatives cannot be sold to China.

Baidu and Huawei have been collaborating since 2020 on making Baidu’s AI platform compatible with Huawei’s hardware. The companies recently announced plans to enhance compatibility between Baidu’s AI model known as Ernie and Huawei’s Ascend chips. While Baidu has been developing its own line of AI chips, it has primarily relied on Nvidia’s A100 chip for training its language models.

When contacted by Reuters regarding this matter, none of the companies provided comments or additional information.

Overall, this development indicates a potential shift in sourcing strategies among Chinese tech companies amidst increasing trade tensions between China and the United States. By turning to domestic options like Huawei for advanced AI chips, these companies may mitigate risks associated with US export restrictions and secure their supply chains for future growth and development in the AI industry.

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