According to a report from TheInformation, Huawei might be gunning for Nvidia with the upcoming potential Microsoft AI chip deal in China. Both the companies are already working together in cloud computing to bring Office 365 to China so going further with their partnership only makes sense.

China recently came up with a policy to use more home based technologies and that might be what lead to this deal taking place. If the deal takes place successfully Nvidia might take a big hit since Microsoft has always used their AI chips in China. Huawei on the other hand would benefit greatly since they were recently banned from operating in the US following some security concerns.

“To convince Microsoft to use its AI chips, Huawei must fulfill the U.S. company’s strict performance requirements. Some Huawei engineers are customizing the software that operates the chips in order to meet Microsoft’s standards, according to one of the people. The engineers are also conducting tests by running Microsoft’s algorithms, such as the Bing search engine’s speech recognition software, on the new Huawei chip.”

Through the means of this AI chip deal, Microsoft is trying to compete with Chinese giants Alibaba and Tencent and attempting to lay down their roots on their market seeing how much potential it has. At the same time they’re trying to understand how the market functions. In a few months time they might become one of the big players.

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