Why Does a Slower Nvidia Help Huawei?

David Sacks says Huawei is catching Nvidia by tying many weaker chips into one rack, and a two or three year Nvidia slowdown lets Huawei close on the frontier much faster. The American edge is the yearly tape-out, not any single chip. Nvidia moves from Ampere to Hopper to Blackwell to Vera Rubin, and each new chip is several times more powerful than the one from the year before. The yearly pace is the real advantage, and a chip that was state of the art four years ago is not where the United States holds the lead.

Huawei was nowhere in GPUs a few years ago, then fielded the Ascend, then Cloud Matrix. Each Huawei chip is less powerful than an American chip and uses a lot more energy, so Huawei networks 384 of them into one rack. Nvidia networks 72 chips in the NVL-72, and the NVL-72 is still better than 384 Huawei chips, yet the racks have been getting closer because Huawei has energy to spare. Turmoil that cripples Nvidia for two or three years lets Huawei catch up a lot faster. AMD and Intel might benefit too, but a massive slowdown mostly helps Huawei.