Baidu ordered AI chips from Huawei in order to replace Nvidia

 Baidu ordered AI chips from Huawei in order to replace Nvidia

According to one of the sources, Baidu, one of the top AI companies in China and the creator of the Ernie large language model (LLM), placed the order in August before the US government's much-awaited new regulations that tightened import duties on chips and chip tools to China in October. These regulations included those of US chip giant Nvidia.

According to two individuals familiar with the situation, Baidu placed an order for artificial intelligence processors from Huawei this year, which is consistent with indications that pressure from the United States is pushing China to accept the company's offerings as a substitute for Nvidia's.

According to one of the sources, Baidu, one of the top AI companies in China and the creator of the Ernie large language model (LLM), placed the order in August before the US government's much-awaited new regulations that tightened import duties on chips and chip tools to China in October. These regulations included those of US chip giant Nvidia.

The source said that Baidu placed an order for 1,600 of Huawei Technologies' 910B Ascend AI processors, which the Chinese company created as a substitute for Nvidia's A100 chip, for 200 servers. By October, the source added, Huawei had sent more than 60% of the order, or around 1,000 chips, to Baidu.

The second source said that Huawei was scheduled to supply all of the chips by the end of this year, with a total estimated value of 450 million yuan ($61.83 million). Because the terms of the agreement were private, both parties chose not to provide their names.

The sources said that while though the purchase is small in comparison to the thousands of chips that leading Chinese IT companies have traditionally bought from Nvidia, it is noteworthy because it demonstrates how some companies may decide to diverge from the American corporation.

Baidu has been a longstanding customer of Nvidia, as have its Chinese counterparts Tencent and Alibaba. It was previously unknown that Baidu was a Huawei client for AI chips.

The initial source said that Huawei's Ascend processors were the most advanced local choice available in China, despite the fact that they are still regarded as performing significantly worse than Nvidia's.

"They were ordering 910B chips in order to plan for a future where they may eventually no longer be able to purchase from Nvidia," according to the first source.

Huawei and Baidu did not reply to messages seeking comment. Nvidia chose not to respond.

According to Huawei's website, the company has been working with Baidu since 2020 to make its AI platform compatible with Huawei technology. The two businesses announced in August that they will improve the interoperability of Huawei's Ascend CPUs with Baidu's Ernie AI model.

Although the business claims that their series of Kunlun AI processors offers large-scale AI processing, Baidu has mostly used Nvidia's A100 CPU to train its LLM.

Nvidia released new A800 and H800 processors as alternatives for Chinese clients, including Baidu, after the U.S. enacted regulations last year that prevented the firm from shipping its A100 and H100 chips to China. The October regulations prevent Nvidia from selling such chips to China any more.

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Last month, analysts projected that Huawei would be able to grow in its $7 billion domestic market as a result of the U.S. limits. U.S. export limits have been in place for the corporation since 2019.

The directive is another example of Huawei's technical progress as Beijing invests heavily in the country's semiconductor sector to help it catch up to international competitors and encourages state-owned companies to switch from imported technology to indigenous products.

When Huawei unexpectedly introduced a new smartphone in August, experts believed it used domestically produced CPUs with cutting-edge semiconductor technology, showing the company's success in chip research despite sanctions. This announcement garnered significant interest from across the world.

Another indication of a resurgence, Reuters revealed in September that Huawei's own chip design unit, HiSilicon, has started shipping freshly built Chinese-made security camera processors to customers in 2023.