Exclusive-Baidu placed AI chip order from Huawei in shift away from Nvidia -sources

investing.com:

BEIJING/SHANGHAI (Reuters) -Baidu ordered artificial intelligence chips from Huawei this year, two people familiar with the matter said, adding to signs that U.S. pressure is prompting Chinese acceptance of the firm's products as an alternative to Nvidia (NASDAQ:NVDA)'s.

One of the people said Baidu (NASDAQ:BIDU), one of China's leading AI firms, which operates the Ernie large language model (LLM), placed the order in August, ahead of widely anticipated new rules by the U.S. government that in October tightened restrictions on exports of chips and chip tools to China, including those of U.S. chip giant Nvidia.

Baidu ordered 1,600 of Huawei Technologies' 910B Ascend AI chips — which the Chinese firm developed as an alternative to Nvidia's A100 chip — for 200 servers, the source said, adding that by October, Huawei had delivered more 60% of the order, or about 1,000 chips, to Baidu.

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

Although the order is tiny relative to the thousands of chips top Chinese tech firms have historically ordered from Nvidia, the sources said it was significant, as it showed how some firms could shift away from the U.S. company.

Baidu, alongside Chinese peers such as Tencent and Alibaba (NYSE:BABA), is known to be a long-time client of Nvidia. Baidu was not previously known to be a AI chip customer of Huawei.

Although Huawei's Ascend chips are still seen as far inferior to Nvidia's in terms of performance, the first source said they were the most sophisticated domestic option available