Aug 13 (Reuters) - China's Huawei Technologies is close

to introducing a new chip for artificial intelligence use to

challenge Nvidia ( NVDA ) in China amid U.S. sanctions, the Wall

Street Journal reported on Tuesday, citing sources.

Huawei's latest processor, Ascend 910C, is being tested by

Chinese internet and telecom companies in recent weeks, the

report said, adding that Huawei has told potential clients that

the chip is comparable to Nvidia's ( NVDA ) H100.

Huawei did not immediately respond to a Reuters request for

comment.

U.S. regulators last year put in place rules that stopped

Nvidia ( NVDA ) from selling its advanced chips, including the H100, to

Chinese customers, citing national security concerns.

Nvidia ( NVDA ) then introduced three chips tailored for China,

including the most-closely watched H20 chips. However, in line

with U.S. sanctions, H20's computing power had been

significantly capped compared to the H100 chips.

The Journal report said Huawei aims to start shipping its

newest chip as soon as October.

Companies such as TikTok parent ByteDance, Baidu ( BIDU )

and China Mobile are looking to obtain the 910C chips.

Initial negotiations between Huawei and potential customers

indicate that orders are likely to surpass 70,000 chips, with a

total value of around $2 billion, according to the report.