Microsoft is presently considering using new artificial intelligence chips from Huawei in a number of its data centers, potentially making a major infrastructure change that would effectively deal a significant blow to NVIDIA, The Information reports, citing sources familiar with the matter. The talks between the two are said to be at an early stage and no definitive agreement has been reached, with both involved parties offering no comments on the revelation.

Microsoft's data centers tasked with machine learning processing and general AI computing predominantly rely on NVIDIA-made GPUs and the Redmond, Washington-based juggernaut has no interest in replacing the entirety of that hardware for the time being, insiders claim. Instead, the currently ongoing talks between Microsoft and Huawei are understood to be pertaining to the former's data centers in China. Huawei's home country houses a number of Microsoft's data centers, with more being likely to open in the near future. Microsoft repeatedly pointed to AI technologies as the backbone of its long-term strategy and already uses such solutions in a wide variety of products and services, ranging from digital assistants and communication platforms to infrastructure management and Bing's search algorithms.

Huawei believes its new chip that's already being sampled can replace NVIDIA's GPUs but has been tasked with modifying its solutions in order to comply with Microsoft's performance requirements. Last week, Huawei's subsidiary HiSilicon unveiled a consumer-facing chip for smartphones in the form of the Kirin 980, with that particular silicon boasting two neural processing unit for on-device AI, twice as many as last year's Kirin 970. A potential partnership with Huawei revolving around data center technologies could put Microsoft at odds with Washington. As evidenced by the example of Google, U.S. lawmakers are taking issues with American companies collaborating with Chinese firms on what they deem are critical technologies, with the last clash between Capitol Hill and Alphabet's subsidiary being prompted by widespread reports that a censored Google Search engine is on its way to China.