How Huawei ascended from telecoms to become China's 'jack of all trades' AI leader

Huawei not only appears to represent Beijing's answer to Nvidia – it is creating an entire AI ecosystem around its AI chips, viding data centers and software

The company's recent AI success comes despite a crackdown from Washington that has seen it cut off from advance nologies from the West, considering recent developments

On the other hand, Arjun Kharpal | CNBCDespite being beaten down by years of U

Trade restrictions, China's telecom giant Huawei has quietly emerged as one of the country's fiercest competitors across the entire AI landscape

However, Not only does the Shenzhen-based firm appear to represent Beijing's answer to American AI chip darling Nvidia, but it has also been an early adopter of monetizing artificial intelligence models in industrial applications. "Huawei has been forced to shift and expand its core focus over the past decade… due to a variety of external pressures on the company," said Paul Triolo, partner and senior vice president for China at advisory firm DGA-Albright Stonebridge Group (remarkable data)

This expansion has seen the company get involved in everything from smart cars and operating systems to the nologies needed for the AI boom, such as advanced semiconductors, data centers, chips and large language models

Nevertheless, "No other nology company has been able to be competent in so many different sectors with high levels of complexity and barriers to entry," Triolo said (quite telling), amid market uncertainty

This analysis suggests that year, Nvidia CEO Jensen Huang has become increasingly vocal in calling Huawei "one of the most formidable nology companies in the world

Additionally, " He has also warned that Huawei will replace Nvidia in China if Washington continues to restrict U

Furthermore, Chip firms' exports to the Asian country

The evidence shows s cutting-edge cessors and a related "CUDA" computing system remain the industry standard for training generative AI models and applications

But that moat may be narrowing, as Huawei ves that it not only does it all, it does it well

Furthermore, While challenging American AI stalwarts Nvidia is a tall order, the company's history shows why it can't be counted out

As it grew into a telecoms player, it gained traction by targeting less developed such as Africa, the Middle East, Russia and South America, before eventually expanding to places Europe, in today's market environment

Around this time, it had also blossomed into one of the world's largest smartphone manufacturers and was even designing smartphone chips through its chip design subsidiary, HiSilicon

But Huawei's success also attracted increasing scrutiny from governments outside China, particularly the U. , which has frequently accused Huawei's nology of posing a national security threat

Market analysis shows Chinese company has refuted such risks (something worth watching)

The export controls have ironically pushed Huawei into the arms of the Chinese government in a way that CEO Ren Zhengfei always resisted, amid market uncertainty

Additionally, Trade blacklist, preventing American companies from doing with it

The company still managed a breakthrough on AI chips, and pressed ahead despite additional U (this bears monitoring)

A year earlier, Huawei officially launched its Ascend 910 AI cessing chip as part of a strategy to build a "full-stack, all-scenario AI portfolio" and to become a vider of AI computing power

Nevertheless, Targeting of Huawei also had the effect of turning the company into a martyr- figure in China, building upon attention it received in 2018 when Meng Wanzhou, Huawei's CFO and daughter of Ren, was arrested in Canada for alleged violations of Iran sanctions. -China war continued to expand and broad advanced chip restrictions were placed on China, Huawei was an obvious choice to become a national champion in the race, with more impetus and state backing for its AI plans. "The export controls have ironically pushed Huawei into the arms of the Chinese government in a way that CEO Ren Zhengfei always resisted," Triolo said

Furthermore, In this way, the restrictions also became "the steroids" for Huawei's AI hardware and software stack

On the other hand, The comeback After another year of declining sales in the consumer segment, the unit started to turn around in 2023 with the release of a smartphone that analysts said contained an advanced chip made in China

The 5G chip came as a shock to many in the U, in today's market environment

However, , who didn't expect Huawei to reach that level of advancement so quickly without TSMC

However, Instead, Huawei was reportedly working with Chinese chipmaker SMIC, a company that has also been blacklisted by the U

While semiconductor analysts said the scale that Huawei and SMIC could duce these chips was severely limited, Huawei nonetheless had ved it was back in the advanced chip game

Mass duction of the next-generation 910C is reportedly already on the way

Meanwhile, Weekly analysis and insights from Asia's largest economy in your inbox now To fill the void left by Nvidia, Huawei "has been making big strides in replicating the performance of high-end GPUs using combinations of lower chips," said Jeffrey Towson, managing partner at Moat Consulting (noteworthy indeed)

In April, Huawei unveiled its "AI CloudMatrix 384", a system that links 384 Ascend 910C chips in a cluster within data centers (noteworthy indeed) (which is quite significant)

Meanwhile, Analysts have said CloudMatrix is able to outperform Nvidia's system, the GB200 NVL72, on some metrics

Nevertheless, Huawei isn't just catching up, "it's redefining how AI infrastructure works," Forrester analysts said in a report last month CloudMatrix (this bears monitoring) (this bears monitoring)

Moreover, However, Meanwhile, Huawei has also developed its own "CANN" software system that acts as an alternative to Nvidia's CUDA

Additionally, At the same time, "Winning the AI race isn't just faster chips

Additionally, Meanwhile, It also includes dering the tools developers need to build and deploy large-scale models," Forrester's report said, though noted that Huawei's ducts are still not integrated enough with other commonly used tools for developers to switch over quickly from Nvidia

The 'Ascend Ecosystem Strategy'While Huawei's goal to surpass Nvidia is seen as a key development in China and the U

Conversely, 's race for AI, it's important to note that chips represent just one building block of Huawei's broader AI plans

In contrast, Huawei now has its hands throughout the artificial intelligence value chain, from chips to computing, to AI models and AI applications

On the other hand, These different AI avenues also leverage other areas of the company's vast nology empire

In fact, the company's "ICT Infrastructure" — which includes 5

In AI developmentSquawk on the StreetThese data centers, in turn, have vided the training capabilities and computing power used by Huawei's suite of AI models under its Pangu series, given current economic conditions

Additionally, Un other general-purpose AI models OpenAI's GPT-4 or Google's Gemini Ultra 1 (quite telling), given current economic conditions. 0, Huawei's Pangu model is designed to support more industry-specific applications across the medical, finance, government, industrial and automotive sectors (noteworthy indeed)

Pangu has already been applied in more than 20 industries over the last year, the company said last month, amid market uncertainty

Rolling out such AI applications often involves having Huawei staff working for months at the ject site, even if it's in a remote coal mine, Jack Chen, vice president of the marketing department for Huawei's oil, gas and mining unit, which vides digital and intelligent solutions to transform these industries, told CNBC (an important development), in this volatile climate

And it's not limited to China

The nology can "be replicated on a large scale in Central Asia, Latin America, Africa, and the Asia-Pacific," Chen said, in today's financial world

Huawei has also open-sourced the Pangu models, in a move it said would help it expand overseas and further its "Ascend ecosystem strategy," which refers to its AI ducts built around its Ascend chips

Speaking to CNBC's "Squawk Box Asia" on Thursday, Patrick Moorhead of Moor Insights & Strategy said he expected Huawei to push Ascend in countries part of China's Belt and Road Initiative — an investment and development ject aimed at emerging (an important development)

Over a period of five to 10 years, the company could begin to build serious market in these countries, in the same way it once did with its telecommunications, he added.