Microsoft and Huawei are reportedly in talks over a possible collaboration that would have the Chinese company supply AI chips for the software giant’s data centers.
While the discussions between the two sides are yet to come to a conclusion, if an agreement is reached the hardest to be hit would be NVIDIA.
At this point, NVIDIA is the sole supplier of chips for Microsoft’s data centers in the United States. Microsoft, however, is exploring additional options for China, where it is considering a potential switch to Huawei not only for the existing data centers, but also for the ones to be launched soon.
Joining forces with a local company is seen as the best way to go in this difficult market, but at the same time, a deal would become a win-win agreement.
A win-win agreement
Huawei, which is struggling to expand its AI chip business, could use the partnership with Microsoft to come to better terms with the US government. Local authorities have previously banned Huawei phones in the United States, and a Microsoft endorsement would help the company expand in the United States and globally, The Information notes.
Even if a partnership between the two companies hasn’t been signed just yet, it’s believed it’s all just a matter of time, especially because Microsoft has made AI an essential part of its long-term strategy.
With China typically requesting foreign firms to join forces with local companies, Microsoft working together with Huawei in this regard seems to be the right way to go, especially because Huawei itself needs the help of Microsoft in the United States market.
More news in this regard is likely to emerge in the coming weeks as discussions between the two companies advance, with an official announcement over a possible deal expected by the end of the year.