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Chinese AI data centers are finding it difficult to make the switch from NVIDIA's AI GPUs to Huawei's products due to software constraints, reports the South China Morning Post. The report outlines that the Chinese government has mandated all publicly funded AI data centers to use at least 50% domestic chips in order to reduce reliance on foreign chips. The chip mandate stemmed from the Shanghai municipality's guidelines last year, which required the city's computing centers to use 50% domestic chips, and these quotas were made mandatory nationwide across China this year, according to the SCMP's sources.
Chinese Data Centers Run Into Trouble When Adopting Huawei's Chips
After the Trump administration allowed NVIDIA to sell its H20 GPUs to China, the chips were caught in a controversy which hinted that they contained backdoors, tracking software or other vulnerabilities. While NVIDIA denied these reports, additional reports claimed that the Chinese government was wary of the hardware. However, soon, sources speculated that China was also wary of relying too much on foreign chips for its AI computing needs - a fact that NVIDIA CEO Jensen Huang had relied on when arguing for the export control restriction removal on his firm's products.
The latest report from the SCMP suggests that China has now made it mandatory for state-run or owned computing infrastructures to rely on domestic chips as well. The details suggest that these centers will now have to use at least 50% of domestically procured chips, a requirement that stems from the Shanghai municipality's rules, which were introduced in 2024.
The latest Chinese chips, which can act as a substitute for NVIDIA's hardware, are those designed by Huawei and manufactured by SMIC. SMIC is the only firm Huawei can turn to for making its chips since US sanctions restrict it from relying on TSMC. As a result, the latest Chinese indigenous chips are restricted to the 7-nanometer process, as shifting to advanced technologies requires EUV equipment, which has also been sanctioned for sale to SMIC by the US.
NVIDIA's chips are also key for training new AI models, according to SCMP's sources. As a result, while Huawei's chips can be used to run new AI models, the government's requirements have created headaches for cluster operators whose AI applications have been developed with NVIDIA's chips.
The troubles stem from the complementary software models required to run the chips. NVIDIA's GPUs run on the CUDA platform while Huawei's chips rely on the CANN platform instead. As a result, data centers that are now forced to use at least 50% of Huawei's chips are struggling to make their AI models that were trained with NVIDIA's chips compatible with Huawei's chips.
