July 27, 2025
5 min read
@jaihamidd
Huawei launches CloudMatrix 384 AI system with 384 chips, aiming to rival Nvidia's top AI hardware amid US export restrictions.
Huawei Unveils CloudMatrix 384, Its Boldest AI Challenge to Nvidia Yet
Huawei unveiled its most aggressive artificial intelligence system to date on Saturday in Shanghai. The CloudMatrix 384 made its first public appearance at the World Artificial Intelligence Conference (WAIC), where companies from across China showcased their newest AI hardware. According to Reuters, Huawei’s latest system is positioned as a direct threat to Nvidia’s top-level server product, the GB200 NVL72, at a time when U.S. export controls continue to block China’s access to advanced foreign chips. The CloudMatrix 384 features 384 of Huawei’s new 910C chips. By comparison, Nvidia’s GB200 NVL72 includes only 72 of its B200 processors. Huawei’s design compensates for each chip’s lower individual performance by stacking more chips and combining them using a “supernode” architecture. This architecture enables ultra-high-speed communication between chips, enhancing processing power at the system level. The goal is to replace foreign hardware that Chinese firms cannot legally purchase with a homegrown alternative capable of competing on performance.Huawei Uses Scale to Counter Banned Chips
Zhang Pingan, CEO of Huawei Cloud, revealed in June that the CloudMatrix 384 system is already operational within Huawei’s cloud platform. The system was initially announced quietly in April, attracting early attention from industry analysts. Dylan Patel, head of semiconductor research firm SemiAnalysis, noted in April that Huawei “now has AI system capabilities that could beat Nvidia.” What drew industry attention was not just the chip count but Huawei’s innovative system scaling. Although the individual chips are less powerful than Nvidia’s, the networking design allows the system to handle demanding AI workloads effectively. SemiAnalysis also reported that Huawei’s setup outperforms Nvidia’s flagship rack on certain metrics. Despite U.S. sanctions, Huawei has emerged as the most viable local AI chip system provider in China. Nvidia CEO Jensen Huang acknowledged Huawei’s rapid progress in a May Bloomberg interview, explicitly citing the CloudMatrix as an example. With Nvidia legally barred from selling its most powerful hardware to China, companies like Huawei are filling the void left behind.Nvidia Responds to Smuggling Claims as Huawei Gains Ground
While Huawei showcased its new system, Nvidia responded to reports of unauthorized chip sales into China. Nvidia told CNBC that data centers built with smuggled chips are a “losing proposition” both technically and financially. This statement followed a Financial Times investigation claiming over $1 billion worth of Nvidia AI chips had entered China through unofficial channels. The report detailed how Nvidia’s B200 chips, banned from export to China, were sold on the black market starting in May. Chinese distributors supplied data center builders whose clients include major Chinese AI groups. The chips have been in high demand since President Donald Trump tightened export controls on chip imports to China. Nvidia attempted to comply by introducing the H20 chip, a custom product designed to circumvent older U.S. sanctions. However, in April, Washington mandated a license for shipping even the H20 chip to China, effectively freezing shipments. Nvidia’s CEO recently confirmed preparations to resume H20 sales following progress in talks with the Trump administration. He also expressed a desire to sell more powerful chips than the H20 to China despite restrictions, though current sales remain limited by U.S. regulations. Meanwhile, Huawei openly rolls out systems like the CloudMatrix 384, fully built with local technology and already integrated into its cloud network.Source: Huawei unveils CloudMatrix 384, its boldest AI challenge to Nvidia yet on July 26, 2025.