Hua­wei Steps Up AI Game, Tes­ting U.S. Do­mi­nance

L'Opinion - - The Wall Street & l'Opíníon - Dan Strumpf

SHAN­GHAI—Hua­wei Tech­no­lo­gies Co. un­vei­led two new com­pu­ting chips ai­med at po­we­ring ar­ti­fi­cial-in­tel­li­gence ap­pli­ca­tions, mar­king the Chi­nese te­le­com­mu­ni­ca­tions giant’s first ma­jor push in­to high-end tech­no­lo­gy do­mi­na­ted by U.S. chip giants.

Hua­wei’s As­cend line of se­mi­con­duc­tors in­cludes a chip that is ins­tal­led on ser­vers and per­forms com­plex AI tasks like pro­gram­ming al­go­rithms, as well as a se­cond chip for more rou­tine func­tions on smart­phones and other de­vices.

With the AI chips, Hua­wei, the world’s big­gest ma­ker of te­le­com­mu­ni­ca­tions equip­ment and a ma­jor smart­phone ven­dor, is chal­len­ging Ame­ri­can com­pa­nies like Nvi­dia Corp. , In­tel Inc. and Qual­comm Inc.

The new com­po­nents ali­gn with broa­der ef­forts by Chi­na to re­duce its de­pen­dence on ad­van­ced U.S. tech­no­lo­gies and de­ve­lop such pro­ducts do­mes­ti­cal­ly. Un­der Bei­jing’s Made in Chi­na 2025 de­ve­lop­ment plan, se­mi­con­duc­tors and AI have emer­ged as key areas that au­tho­ri­ties want to de­ve­lop at home.

“Com­pu­ting po­wer is the foun­da­tion of AI,” said Eric Xu, Hua­wei’s chair­man, at a confe­rence in Shan­ghai on Wed­nes­day. “We need to pro­vide more abun­dant and af­for­dable com­pu­ting po­wer.”

Other Chi­nese com­pa­nies are al­so pou­ring re­sources in­to de­ve­lo­ping AI chips, which ty­pi­cal­ly fea­ture unique de­si­gns op­ti­mi­zed for pro­ces­sing large amounts of da­ta at once. Last month, e-com­merce giant Ali­ba­ba Hol­dings Ltd. an­noun­ced plans to launch an AI chip next year, while Chi­nese star­tups like Bit­main Tech­no­lo­gies Ltd and Cam­bri­con Tech­no­lo­gies Corp. are al­so wor­king on such com­po­nents.

Hua­wei al­rea­dy ma­nu­fac­tures an AI-en­abled chip for its smart­phones un­der its Ki­rin brand. The com­pa­ny is li­ke­ly to find a willing mar­ket for the new com­po­nents in its home mar­ket of Chi­na, but it will face chal­lenges in un­sea­ting ri­vals el­sew­here around the world, said Mo Jia, an ana­lyst at tech­no­lo­gy consul­ting firm Ca­na­lys.

“Hua­wei is li­ke­ly to use a lo­wer-price en­trance stra­te­gy si­mi­lar to its in­fra­struc­ture or ser­ver bu­si­ness” to break in­to the mar­ket, Mr. Jia said. “In the fu­ture, I think Hua­wei’s AI mar­ket will main­ly be in the Chi­nese mar­ket.”

Cur­rent­ly, the mar­ket for po­wer­ful chips ca­pable of ad­van­ced AI pro­cesses like deep lear­ning is led by Ame­ri­can com­pa­nies like San­ta Cla­ra, Ca­lif.-ba­sed Nvi­dia. Google al­so of­fers a si­mi­lar chip cal­led a ten­sor pro­ces­sing unit, while com­pa­nies like Qual­comm make AI chips built in­to de­vices.

Ho­we­ver, un­like those chip ma­kers, Hua­wei won’t be sel­ling the chips di­rect­ly to cus­to­mers, Mr. Xu said. Ins­tead, the chips will be sold as a part of ser­vers, mo­dules and via its exis­ting cloud-com­pu­ting bu­si­ness to Hua­wei cus­to­mers, he said.

The AI ef­fort fol­lows suc­cess for Hua­wei in its mo­bile-phone bu­si­ness, which ear­lier this year over­took Apple Inc. as the world’s No. 2 ven­dor of smart­phones af­ter Sam­sung Tech­no­lo­gies Co.

At the same time, Hua­wei is wea­the­ring in­crea­sed scru­ti­ny this year from au­tho­ri­ties in the U.S., where its te­le­com gear has been ban­ned due to se­cu­ri­ty concerns.

Such fears led Aus­tra­lia to bar Hua­wei from its fifth-ge­ne­ra­tion wi­re­less rol­lout, while of­fi­cials in Ja­pan are stu­dying si­mi­lar moves. Hua­wei has long said it isn’t a se­cu­ri­ty threat and that it is ow­ned by its em­ployees and ope­rates in­de­pen­dent­ly of Bei­jing.


Hua­wei is the world’s big­gest ma­ker of te­le­coms equip­ment and a ma­jor smart­phone ven­dor.

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