Notes: Huawei’s 910C and CM384: A Strategic Shock to the NVIDIA Thesis (Pt.1)

Summary

• Huawei’s 910C and CM384 achieve H100-class and Blackwell-scale performance using older nodes, challenging the idea that leading-edge silicon is NVIDIA’s unassailable moat.
• System-level innovations and full-stack integration enable Huawei to deliver better real-world efficiency and scalability in key AI workloads.
• While uninvestable, Huawei’s rise threatens NVIDIA’s pricing power and dominance in China and may erode global competitive differentiation over time.

Executive Summary

• The DeepSeek moment is coming for AI hardware. We believe Huawei's Ascend 910C marks a turning point—akin to DeepSeek V2's quiet breakthrough before V3 and R1 reached mass recognition. It signals the beginning of a shift where system-level innovation, not just raw silicon, defines leadership.
• Following a pause in 2022, Huawei revived its Ascend chip program amid rising AI demand and U.S. sanctions. The result: the 910C and CM384 — credible Hopper-class and Blackwell-scale alternatives — built on mature 7nm and HBM2e, but architecturally scaled to deliver 2x the system performance of NVIDIA’s flagship.
• While the 910C’s chip-level performance is comparable to the H100, Huawei’s deep integration across networking, memory, power, and software enables it to exceed real-world performance benchmarks, including inference throughput and system linearity, even on older nodes.
• Huawei is not just matching competitors — it is leapfrogging them through a vertically integrated strategy that prioritizes architectural ingenuity over leading-edge fabs. This mirrors its contrarian success in LiDAR-based ADAS, where it reduced costs 10x to deliver highway L3 autonomy ahead of Tesla.
• Huawei Cloud is emerging as a challenger to the top three hyperscalers, underpinned by a broad portfolio of in-house products and early deployment of AI-native security agents. Its Palantir-style forward-deployed engineering model further enhances adoption and AI ROI.
• Huawei’s rapid catch-up in AI compute—achieving H100-level performance and Blackwell-level system throughput using older nodes—challenges the assumption that NVIDIA’s moat is protected by cutting-edge silicon alone.
• While Huawei is not investable, its rise erodes NVIDIA’s long-term pricing power and system differentiation, especially in China and other non-Western markets where Huawei can offer comparable or superior performance at lower cost—undermining the exclusivity that underpins the NVIDIA bull case.

The most ironic outcome often becomes the most likely. U.S. sanctions on Huawei and the broader Chinese semiconductor ecosystem are increasingly showing signs of backfiring. Growing evidence suggests that these restrictions, intended to suppress China’s chip advancement, are instead accelerating the development of its domestic semiconductor industry. While the sanctions have caused short-term disruption, they are now laying the groundwork for long-term resilience and technological independence.

At the Huawei Cloud Ecosystem Conference on April 10, 2025, Huawei officially unveiled the Ascend 910C and Cloud Matrix 384 — validating predictions we made during our NVDA MSU report in December 2023. Similar in concept to NVIDIA’s Blackwell, the 910C packages two 910B dies together, while keeping the underlying microarchitecture largely unchanged.