Latest news with #PaulTriolo
Business Insider
01-08-2025
- Business
- Business Insider
Nvidia Stock (NVDA) Remains Defiant Despite Chinese AI Chip Security Probe
Nvidia (NVDA) stock was higher today despite being hauled in by China's cybersecurity regulator over security concerns around its AI chips. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Serious Concerns The Cyberspace Administration of China (CAC) has reportedly summoned the U.S. semiconductor giant to explain 'backdoor security risks' of its H20 chips sold in China and submit relevant documents. Indeed, a meeting has already been held between the regulator and Nvidia over the 'serious security issues.' The move is reportedly aimed at 'safeguarding the network and data security of Chinese users' after comments from American AI experts suggested that Nvidia's chips have location tracking and can remotely shut down the technology. According to the Financial Times, it is not clear who these experts are and if China has undertaken its own tests into the chips. Paul Triolo, a China tech expert, told the FT that he was 'skeptical' about the 'backdoor' claims given the lack of detail in the original CAC statement. Crucial Period It comes at an important time for Nvidia and its relationship with China, which is a key part of its business model. Earlier this month, Nvidia said that it could resume its H20 AI chip sales in China, months after the U.S. Commerce Department put export restrictions on the chips amid ramped-up U.S.-China tariff trade tensions. Nvidia estimated that the ban had cost it a huge $15 billion in lost sales. The chip was specially designed for Chinese customers to meet U.S. export rules and has been a top seller in the country since 2024. Nvidia has also introduced a new AI chip for China. The model is designed for use in factory automation and logistics and is built on the company's advanced Blackwell architecture. Nvidia chief executive Jensen Huang, had hoped the end of the ban would help keep the company's share price soaring as it taps into the potential $50 billion Chinese AI market. However, it faces pressure within China, where rivals such as Huawei have benefited from the H20 absence, and the U.S. given continued tensions between the two nations. Is NVDA a Good Stock to Buy Now? On TipRanks, NVDA has a Strong Buy consensus based on 34 Buy, 3 Hold and 1 Sell ratings. Its highest price target is $250.
CNBC
21-07-2025
- Business
- CNBC
How Huawei ascended from telecoms to China's 'jack of all trades' AI leader
Despite being beaten down by years of U.S. trade restrictions, China's telecom giant Huawei has quietly emerged as one of the country's fiercest competitors across the entire AI landscape. 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 business 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. This expansion has seen the company get involved in everything from smart cars and operating systems to the technologies needed for the AI boom, such as advanced semiconductors, data centers, chips and large language models. "No other technology company has been able to be competent in so many different sectors with high levels of complexity and barriers to entry," Triolo said. This year, Nvidia CEO Jensen Huang has become increasingly vocal in calling Huawei "one of the most formidable technology companies in the world." He has also warned that Huawei will replace Nvidia in China if Washington continues to restrict U.S. chip firms' exports to the Asian country. Nvidia surpassed $4 trillion in market capitalization last week to become the world's most valuable company. Its cutting-edge processors 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 proves that it not only does it all, it does it well. While challenging American AI stalwarts like Nvidia is a tall order, the company's history shows why it can't be counted out. Huawei, which now employs more than 208,000 people across over 170 markets, came from humble beginnings. Founded by ambitious entrepreneur Ren Zhengfei in 1987 out of an apartment in Shenzhen, the firm started as a small telephone switch distributor. As it grew into a telecoms player, it gained traction by targeting less developed markets such as Africa, the Middle East, Russia and South America, before eventually expanding to places like Europe. By 2019, Huawei would be well-positioned to capitalize on the global 5G rollout, becoming a leader in the market. 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.S., which has frequently accused Huawei's technology of posing a national security threat. The Chinese company has refuted such risks. Huawei's business suffered a major setback in 2019 when it was placed on a U.S. trade blacklist, preventing American companies from doing business with it. As the impact of the sanctions kicked in, Huawei's consumer business – once the company's largest by revenue – halved to about $34 billion in 2021 from the year before. The company still managed a breakthrough on AI chips, and pressed ahead despite additional U.S. restrictions in 2020 that cut the company off from chipmaker Taiwan Semiconductor Manufacturing Co. A year earlier, Huawei officially launched its Ascend 910 AI processing chip as part of a strategy to build a "full-stack, all-scenario AI portfolio" and to become a provider of AI computing power. But the U.S. targeting of Huawei also had the effect of turning the company into a martyr-like 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. As the U.S.-China tech 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. In this way, the restrictions also became "the steroids" for Huawei's AI hardware and software stack. 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.S., who didn't expect Huawei to reach that level of advancement so quickly without TSMC. Instead, Huawei was reportedly working with Chinese chipmaker SMIC, a company that has also been blacklisted by the U.S. While semiconductor analysts said the scale that Huawei and SMIC could produce these chips was severely limited, Huawei nonetheless had proved it was back in the advanced chip game. It was also around this time that reports began surfacing about Huawei's new AI processor chip, the Ascend 910B, with the company looking to seize upon gaps left by export controls on Nvidia's most advanced chips. Mass production of the next-generation 910C is reportedly already on the way. 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 TechMoat Consulting. In April, Huawei unveiled its "AI CloudMatrix 384", a system that links 384 Ascend 910C chips in a cluster within data centers. Analysts have said CloudMatrix is able to outperform Nvidia's system, the GB200 NVL72, on some metrics. Huawei isn't just catching up, "it's redefining how AI infrastructure works," Forrester analysts said in a report last month about CloudMatrix. Meanwhile, Huawei has also developed its own "CANN" software system that acts as an alternative to Nvidia's CUDA. "Winning the AI race isn't just about faster chips. It also includes delivering the tools developers need to build and deploy large-scale models," Forrester's report said, though authors noted that Huawei's products are still not integrated enough with other commonly used tools for developers to switch over quickly from Nvidia. While Huawei's goal to surpass Nvidia is seen as a key development in China and the U.S.'s race for AI, it's important to note that chips represent just one building block of Huawei's broader AI plans. Huawei now has its hands throughout the artificial intelligence value chain, from chips to computing, to AI models and AI applications. These different AI business avenues also leverage other areas of the company's vast technology empire. In fact, the company's "ICT Infrastructure" business — which includes 5.5G cellular network deployment and AI systems for industrial use — became the company's largest revenue driver at 362 billion yuan in 2023. The company has been deploying its Ascend AI chips and AI CloudMatrix 384 at its growing portfolio of AI data centers, which are operated by its cloud computing unit, Huawei Cloud, established in 2017 to compete with the likes of Amazon Web Services and Oracle. These data centers, in turn, have provided the training capabilities and computing power used by Huawei's suite of AI models under its Pangu series. Unlike other general-purpose AI models like OpenAI's GPT-4 or Google's Gemini Ultra 1.0, Huawei's Pangu model is designed to support more industry-specific applications across the medical, finance, government, industrial and automotive sectors. Pangu has already been applied in more than 20 industries over the last year, the company said last month. Rolling out such AI applications often involves having Huawei tech staff working for months at the project 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 business unit, which provides digital and intelligent solutions to transform these industries, told CNBC. That research enabled the company in May to deploy more 100 electric-powered trucks that can autonomously transport dirt or coal using the telecom company's 5G network, AI and cloud computing services. And it's not limited to China. The technology can "be replicated on a large scale in Central Asia, Latin America, Africa, and the Asia-Pacific," Chen said. 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 products 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 project aimed at emerging markets. Over a period of five to 10 years, the company could begin to build serious market share in these countries, in the same way it once did with its telecommunications business, he added.
CNBC
01-07-2025
- Business
- CNBC
China's Huawei open-sources AI models as it seeks adoption across the global AI market
Huawei has open-sourced its artificial intelligence models — a move tech experts say will help the U.S.-blacklisted firm continue to build its AI ecosystem and expand overseas. The Chinese tech giant announced on Monday the open-sourcing of two of its AI models under its Pangu series, as well as some of its model reasoning technology. The moves are in line with other Chinese AI players that continue to push an open-source development strategy. Baidu also open-sourced its large language model series Ernie on Monday. Tech experts told CNBC that Huawei's latest announcements not only highlight how it is solidifying itself as an open-source LLM player, but also how it is strengthening its position across the entire AI value chain as it works to overcome U.S.-led AI chip export restrictions. In recent years, the company has transformed from a competent private sector telecommunications firm into a "muscular technology juggernaut straddling the entire AI hardware and software stack," said Paul Triolo, partner and senior vice president for China at advisory firm DGA-Albright Stonebridge Group. In its announcement Monday, Huawei called the open-source moves another key measure for Huawei's "Ascend ecosystem strategy" that would help speed up the adoption of AI across "thousands of industries." The Ascend ecosystem refers to AI products built around the company's Ascend AI chip series, which are widely considered to be China's leading competitor to products from American chip giant Nvidia. Nvidia is restricted from selling its advanced products to China. Pangu being available in an open-source manner allows developers and businesses to test the models and customize them for their needs, said Lian Jye Su, chief analyst at Omdia. "The move is expected to incentivize the use of other Huawei products," he added. According to experts, the coupling of Huawei's Pangu models with the company's AI chips and related products gives the company a unique advantage, allowing it to optimize its AI solutions and applications. While competitors like Baidu have LLMs with broad capabilities, Huawei has focused on specialized AI models for sectors such as government, finance and manufacturing. "Huawei is not as strong as companies like DeepSeek and Baidu at the overall software level – but it doesn't need to be," said Marc Einstein, research director at Counterpoint Research. "Its objective is to ultimately use open source products to drive hardware sales, which is a completely different model from others. It also collaborates with DeepSeek, Baidu and others and will continue to do so," he added. Ray Wang, principal analyst at Constellation Research, said the chip-to-model strategy is similar to that of Google, a company that is also developing AI chips and AI models like its open-source Gemma models. Huawei's announcement on Monday could also help with its international ambitions. Huawei, along with players like Zhipu AI, has been slowly making inroads into new overseas markets. In its announcement Monday, Huawei invited developers, corporate partners and researchers around the world to download and use its new open-source products in order to gather feedback and improve them. "Huawei's open-source strategy will resonate well in developing countries where enterprises are more price-sensitive as is the case with [Huawei's] other products," Einstein said. As part of its global strategy, the company has also been looking to bring its latest AI data center solutions to new countries.
CNBC
16-06-2025
- Business
- CNBC
Taiwan blacklists China's Huawei and SMIC, further aligning with U.S. trade policy
Taiwan has added China's Huawei and SMIC to its trade blacklist in a move that further aligns it with U.S. trade policy and comes amid growing tensions with Beijing. The International Trade Administration of Taiwan added Huawei and SMIC to its "Strategic High-Tech Commodities Entity List," including a host of their subsidiaries. Taiwan's current regulations require licenses from regulators before domestic firms can ship products to parties named on the entity list. Huawei and SMIC, two of China's leading semiconductor companies, are also on a trade blacklist in the United States and have been impacted by Washington's sweeping controls on advanced chips. Companies such as contract chipmaker Taiwan Semiconductor Manufacturing Co already follow U.S. export restrictions. However, the addition of Huawei and SMIC to the Taiwan blacklist is likely aimed at the reinforcement of this policy and a tightening of existing loopholes, Ray Wang, an independent semiconductor and tech analyst, told CNBC. He added that the new domestic export controls could also raise the punishment for any potential breaches in the future. TSMC had been embroiled in controversy in October last year when semiconductor research firm TechInsights found a TSMC-made chip in a Huawei AI training card. Following the discovery, the U.S. Commerce Department ordered TSMC to halt Chinese clients' access to chips used for AI services, according to a report from Reuters. TSMC could also reportedly face a $1 billion as penalty to settle a U.S. investigation into the matter. Huawei has been working to create viable alternatives to Nvidia's general processing units used for AI. However, experts say the company's advancement has been limited by export controls and a lack of scale and advancement in the domestic chip ecosystem. Still, Huawei had been able to acquire several million GPU dies from TSMC for its Ascend chip design by using previous loopholes before they were discovered, according to Paul Triolo, partner and senior vice president for China at advisory firm DGA-Albright Stonebridge Group. A die refers to a small piece of silicon material that serves as the foundation for building processors and contains the intricate circuitry and components necessary to perform computations. The Taiwanese government's crackdown on exports to SMIC and Huawei also comes amid tense geopolitical tensions with Mainland China, which regards the democratically governed island as its own territory to be reunited by force, if necessary. In April, the U.S. reaffirmed its commitment to support the existing status quo as China conducted large-scale military exercises off the coast of the island. In statements reported by state media on Sunday, China's top political adviser Wang Huning echoed Beijing's position, calling for the promotion of national reunification with Taiwan and for resolute opposition to Taiwan independence.
The Star
12-06-2025
- Business
- The Star
China's trump card against US
THE nation is counting on one crucial advantage as it seeks to grind out a deal to ease its high-stakes trade war with the United States – dominance in rare earths. Used in electric vehicles, hard drives, wind turbines and missiles, rare earth elements are essential to the modern economy and national defence. Here's a look at how rare earths have become a key sticking point in talks between the United States and China. Mining boom: 'The Middle East has oil. China has rare earths,' Deng Xiaoping, the late Chinese leader whose pro-market reforms set the country on its path to becoming an economic powerhouse, said in 1992. Since then, Beijing's heavy investment in state-owned mining firms and lax environmental regulations compared to other industry players have turned China into the world's top supplier. The country now accounts for 92% of global refined output, according to the International Energy Agency. But the flow of rare earths from China to manufacturers around the world has slowed after Beijing in early April began requiring domestic exporters to apply for a licence – widely seen as a response to US tariffs. Under the new requirements – which industry groups have said are complex and slow-moving – seven key elements and related magnets require Beijing's approval to be shipped to foreign buyers. Deep impact: Ensuring access to the vital elements has become a top priority for US officials in talks with Chinese counterparts, with the two sides meeting this week in London. 'The rare earth issue has clearly ... overpowered the other parts of the trade negotiations because of stoppages at plants in the United States,' said Paul Triolo, a technology expert at the Asia Society Policy Institute's Center for China Analysis, in an online seminar on Monday. That disruption, which forced US car giant Ford to temporarily halt production of its Explorer SUV, 'really got the attention of the White House', said Triolo. Officials from the two countries said on Tuesday that they had agreed on a 'framework' for moving forward on trade – with US Commerce Secretary Howard Lutnick expressing optimism that concerns over access to rare earths 'will be resolved' eventually. Rare earth advantage: The slowing of licence issuance has raised fears that more automakers will be forced to halt production while they await shipments. China's commerce ministry said over the weekend that as a 'responsible major country', it had approved a certain number of export applications, adding that it was willing to strengthen related dialogue with 'relevant countries'. But that bottleneck has highlighted Washington's reliance on Chinese rare earths for producing its defence equipment even as trade and geopolitical tensions deepen. An F-35 fighter jet contains over 400kg of rare earth elements, noted a recent analysis by Gracelin Baskaran and Meredith Schwartz of the Critical Minerals Security Program at the Center for Strategic and International Studies. 'Developing mining and processing capabilities requires a long-term effort, meaning the United States will be on the back foot for the foreseeable future,' they wrote. Playing catch up: The recent export control measures are not the first time China has leveraged its dominance of rare earths supply chains. After a 2010 maritime collision between a Chinese trawler and Japanese coast guard boats in disputed waters, Beijing briefly halted shipments of its rare earths to Tokyo. The episode spurred Japan to invest in alternative sources and improve stockpiling of the vital elements – with limited success. That is 'a good illustration of the difficulty of actually reducing dependence on China,' said Triolo, noting that in the 15 years since the incident, Japan has achieved only 'marginal gains'. The Pentagon is trying to catch up, with its 'mine-to-magnet' strategy aiming to ensure an all-domestic supply chain for the key components by 2027. The challenge facing Washington to compete with Beijing in rare earths is compounded by sheer luck: China sits on the world's largest reserves. 'Mineable concentrations are less common than for most other mineral commodities, making extraction more costly,' wrote Rico Luman and Ewa Manthey of ING in an analysis published on Tuesday. 'It is this complex and costly extraction and processing that make rare earths strategically significant,' they wrote. 'This gives China a strong negotiating position.' — AFP
