Nvidia seeing increased AI competition from China's Huawei as US export restrictions persist

Nvidia Corporation has had its work cut out for it since the start of 2025 as the AI darling of the West continues to fend off both competition from domestic and international players in the inference and training segments of the market as well as an increasingly rocky regulatory route owing to the current US administration's decisions.

News first covered by The Wall Street Journal (paywall) indicates that Team Green may be set for another disruption, this one coming from China's primary AI chip manufacturer, Huawei and its upcoming Ascend 910D chip. This comes hot on the heels of the previously announced Ascend 910C and is set to be unwrapped in the coming days.

Lest we forget, Nvidia already has its hands tied by the Biden-era AI Diffusion Rule aiming to keep the best AI chips strictly for domestic consumption or limited to a trusted set of allies of the United States. The Trump administration has also added to this with a licensing requirement that restricts Nvidia's ability to sell its staple H20 chip (which was developed due to restrictions on the more powerful H100, H200 and Blackwell-based offerings) in China, something that has caused the chip design giant to take a massive $5.5 billion charge in its filings with the SEC ahead of its May 28th earnings.

While Huawei is claiming H100-esque performance for its Ascend 910C chips, the Ascend 910D remains a yet-to-be quantified offering, but engineer skepticism about Huawei's claims regarding both performance and efficiency of the former might carry on to the latter until proven otherwise.

With that being said, Nvidia's inability to sell even a watered-down, but competent alternative to Huawei's offerings as well a performance equivalent to its H20 chip is expected to shape both, China's already burgeoning AI and chip design ambitions as well as its focus on home-grown solutions. In the meantime, Nvidia is set to receive a large dent to its bottom line as well as its profitability thanks to the large market it now finds itself essentially locked out of.

Nvidia has previously also offered performance-restricted versions of its RTX 4090 and more recently RTX 5090 GPUs with China-specific RTX 4090D and RTX 5090D offerings for gamers and productivity users even as it committed to a massive $500 billion in AI-related spending in the US in a bid to appease the current administration, something that has possibly not panned out as expected for the semiconductor giant if recent developments are to be taken into account.