China's Huawei Takes Aim at Qualcomm, Nvidia With New AI Chips

(Bloomberg) -- Huawei Technologies Co. has overtaken Apple Inc. in smartphones. Now it wants to take on some of America’s largest technology companies in semiconductors.

China’s largest telecommunications gear and mobile phone maker on Wednesday unveiled its latest Ascend series chips, machine-learning capable workhorses that it says can go toe-to-toe with designs from Qualcomm Inc. and Nvidia Corp. It’s also introducing cloud computing services and dedicated data centers for autonomous vehicles that will run off those chips, delving deeper into territory staked out by Amazon.com Inc., Microsoft Corp. and homegrown rival Alibaba Group Holding Ltd.

The push into AI and the cloud marks Huawei’s attempt to build a Chinese technology empire that can compete against the world’s top players -- an effort that’s raised hackles in the U.S. Its expanded ambitions come as Washington, trying to contain China’s rapid ascent, wages a war of tariffs against its closest economic rival. Growing concerns about the security of Huawei’s gear and supposed ties to Beijing are also putting pressure on its overseas operation. In response, the company says it’s a privately run corporation keen on working with global partners.

“Huawei’s AI strategy is built on top of continued investment in basic technologies and talent training,” Chairman Eric Xu told the Huawei Connect conference in Shanghai.

The company’s AI chips underpin that strategic thrust, and align with Beijing’s express intention to build a domestic semiconductor industry that can gradually wean China off foreign imports. Huawei already designs AI-capable “Kirin” processors for its own smartphones, shipments of which pulled ahead of Apple for the first time in the second quarter. The Kirin line can, among other things, adjust computing resources based on usage.

It’s already by some reckonings the world’s largest provider of networking equipment to wireless carriers, outstripping the likes of Ericsson with growing sales in Europe. The company, however, is facing more scrutiny, damaging an overseas business that generates roughly 70 percent of its revenue. It continues to be shut out of the U.S., which fears its equipment poses a security threat. A growing number of developed markets such as Australia now bar the company’s telecoms equipment out of similar security concerns.