Just in, Baidu ordered artificial intelligence chips from Huawei this year, two people familiar with the matter said, further suggesting U.S. pressure is pushing China to accept the chips as an alternative to Nvidia's offerings, Reuters reported.

Baidu, one of China's leading AI companies that operates Ernie's Large Language Model (LLM), placed the order in August, one of the people familiar with the matter said, ahead of widely expected new U.S. government rules tightening chip export restrictions in October and the export of chip tools to China, including those from U.S. chip giant Nvidia.

Baidu ordered 1,600 Huawei Technologies' 910B Ascend AI chips for 200 servers (the chip was developed by the Chinese firm as a replacement for Nvidia's A100 chip), the sources said, adding that Huawei had delivered more than 60 per cent of the order, or about 1,000 chips, by October.

The total value of the order is about 450 million yuan ($61.83 million), and Huawei will deliver all the chips by the end of this year, the second person said. Both declined to be named as details of the deal are confidential.

Although the order is small compared to the thousands of chips that China's top tech companies have historically ordered from Nvidia, the sources said the order is significant because it suggests that some companies may be abandoning the U.S. firm.

Baidu, as well as its Chinese counterparts such as Tencent and Alibaba, are known to be long-time customers of NVIDIA. It was not previously known that Baidu was a Huawei AI chip customer.

Analysts predicted last month that US restrictions would create opportunities for Huawei to expand in its $7bn domestic market. The company has been under US export controls since 2019.

The order increases the advancement of Huawei's technology. Huawei's surprise launch of a new smartphone in August drew widespread global attention, with analysts saying the smartphone featured an in-house developed processor using advanced semiconductor technology, highlighting the company's progress in chip development despite the sanctions.

In September, Reuters reported that Huawei's in-house chip design unit, Hesi Semiconductor, had begun shipping newly developed Chinese-made surveillance camera processors to customers in 2023.

Disclaimer: The news in this article originated from the first financial, Tianfeng Securities, by the YuanXinAi electronic collation, the news has not been officially confirmed, only for the purpose of communication and learning.