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Nvidia headquarters in Santa Clara, California, photographed on February 15, 2024.
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Nvidia counts Huawei as a top competitor in many areas, including producing critical processors that power artificial intelligence (AI) systems.
The Santa Clara-based company said Wednesday in its annual report that Huawei is a competitor in four of the five main categories of its business: graphics processing units (GPUs), cloud services, hardware and software for Arm-based central processing units (CPUs) and networking products. CNN has reached out to Huawei for comment.
Other companies are also listed as competitors. Some areas include AMD (AMD), Amazon (AMZN), Microsoft (MSFT), and Broadcom (AVGO).
Huawei’s naming comes as NVDA CEO Jensen Huang told reporters in Singapore that the Chinese tech giant is facing “formidable” competition in AI chip production, Reuters reports. It is said that this took place just two months after they told each other that they were the other party.
The Shenzhen-based company, which makes smartphones and communication equipment, surprised the world last year with the release of the Mate 60 Pro, a cutting-edge mobile phone equipped with advanced chips.
Questions swirled about how Huawei was able to produce the phones despite spending four years under U.S. regulations that bar it from accessing 5G technology.
Analysts said the breakthrough was a “milestone” achievement for China as the two countries are embroiled in a battle over semiconductor technology.
In October 2022, the Biden administration imposed sweeping regulations aimed at restricting China’s access to advanced computing chips. In early 2023, Japan and the Netherlands joined the United States in restricting exports of chip manufacturing technology to China.
The Chinese government also fought back. In April 2023, it launched a cybersecurity investigation into Micron and subsequently banned Micron from selling to Chinese companies working on major infrastructure projects. In July, it imposed export restrictions on gallium and germanium, two strategic raw materials critical to the global chip manufacturing industry.
In October 2023, the Biden administration tightened regulations on sales of cutting-edge semiconductors by US companies.
Nvidia has expressed concern that it will become further embroiled in geopolitical tensions between the US and China.
The company’s competitive position has been compromised and any further changes to U.S. chip export regulations could further impact it in the long term, it said in its annual report.
“If such a change occurs, [in US export control rules], we may not be able to sell our inventory of such products or develop alternative products that are not subject to licensing requirements, and we may be unable to sell our inventory of such products or develop alternative products that are not subject to licensing requirements, and we may be unable to sell all or a portion of the Chinese market and other affected markets, including the Middle East. They are effectively shut out of the market. ,” said.
Nvidia announced strong financial results on Wednesday. Profits for the three months ended January 28 were up 769% from the same period last year. However, the company’s business in China has been hit by U.S. restrictions on chip sales to the country.
“Growth was strong in all regions except China, where our data center revenue declined significantly following export control restrictions imposed by the U.S. government in October.” [2022]” Nvidia Chief Financial Officer Colette Kress said in an earnings call.
Data centers, including graphics cards widely used in generative AI, are Nvidia’s biggest source of revenue. In the fourth quarter, revenue from its core data center business rose 409% year over year to $18.4 billion, a record high.
He said China accounted for a “mid-single-digit percentage” of the company’s data center revenue in the fourth quarter and expected it to remain in a “similar range” this quarter.
Nvidia declined to comment on this news.
CNN’s Rob McLean and David Goldman contributed reporting.
