#NVIDIA The emergence of new advanced artificial intelligence chips from Huawei could threaten US semiconductor giant Nvidia (NASDAQ:NVDA) in the short term, according to analysts at Piper Sandler.

Huawei plans to begin mass shipments of the AI processor 910C to Chinese customers as soon as next month, Reuters reported earlier this week. The 910C is more of an architecture evolution than a technological advancement and offers performance comparable to Nvidia's H100 products, Reuters said.

Citing sources familiar with the matter, the news agency reported that some shipments of the 910C - known as Ascend - may have already taken place.

This launch comes at a crucial time for Chinese AI companies, many of which have been racing to find domestic suppliers after stricter US rules on the export of Nvidia's high-end H20 chips to China were imposed by the Trump administration.

Earlier this month, the White House informed Nvidia that H20 sales would require an export license. This move is seen as the latest push from Washington to limit China's advancements in critical technology, especially in its military.

In a note to clients, analysts at Piper Sandler led by Harsh Kumar argued that, even if the H20 export restrictions to China are not enforced, the 910C will still provide Chinese customers with "a viable second source with far less risk."

"The economic war with China will continue with the Trump Administration and efforts from both sides to make business difficult are unlikely to stop in the future," analysts wrote.

"Thus, every future generation of computing chips for China from Nvidia is likely to be threatened according to our view."

They added that Nvidia's main operations in China could be impacted in the long term if US export controls remain in their current form and give Huawei more time to "bridge the performance gap."

However, analysts argue that the regulations may not be strict enough, creating "many loopholes" that give China access to critical technologies such as high bandwidth memory and cutting-edge wafer production.

"The US government is likely to close several gaps that Huawei currently has access to in order to reduce their technological innovation," they said.

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