What's Going On Nvidia Stock Tuesday?

Nvidia Corp NVDA lost to Huawei Technologies Co for a sizeable artificial intelligence chip order from Chinese tech giant Baidu Inc BIDU thanks to the U.S. embargo on AI technology chips for China.

The former powerhouse telecoms and smartphones company has, for the past four years, been building an AI chip line, Reuters reports.

Also Read: Great News for Nvidia? Amazon, Google, Microsoft Spending Big On AI and Cloud

When Huawei showcased its Ascend 910 in 2018, rivaling Nvidia's A100, claiming the former as the most potent AI processor, reportedly manufactured on a 7-nanometer process, the U.S. slapped export controls on the company. 

However, Nvidia's A100 and H100 chips in 2020 and 2022, respectively, swept up most of the AI chip market share globally.

Experts flagged Nvidia's massive incumbent advantage over Huawei courtesy of the reliance of existing AI projects on Nvidia's software ecosystem.

Meanwhile, in August, reports indicated Ascend 910B as Huawei's answer to the Nvidia A100. 

Baidu ordered 1,600 of Huawei 910B chips for 200 servers in August. Analysts say that the 910B chips are comparable to Nvidia's in raw computing power while lagging in performance Reuters report said.

Analysts have estimated China's AI chip market is worth $7 billion.

Huawei has, on numerous occasions, voiced its ambitions to become a key provider of computing power for AI, including building a computing base for China.

Last week, reports indicated Nvidia losing on orders over $5 billion in 2024 from China's leading AI and cloud-computing companies, including Alibaba Group Holding Limited BABA.

A separate report claimed China's Semiconductor Manufacturing International Corp developing a new chip rivaling Nvidia's AI chips in image recognition and autonomous driving.

Price Action: NVDA shares traded lower by 0.57% at $454.83 on the last check Tuesday.