SINGAPORE/BEIJING, April 21 (Reuters) - Huawei Technologies plans to begin mass shipments of its advanced 910C artificial intelligence chip to Chinese customers as early as next month, two people familiar with the matter said.

Some shipments have already been made, they added.

Nvidia shares sank 3% in premarket trading.

The timing is fortuitous for Chinese AI companies which have been left scrambling for domestic alternatives to the H20, the primary AI chip that Nvidia had until recently been allowed to sell freely in the Chinese market.

This month, U.S. President Donald Trump's administration told Nvidia that sales of the H20 would require an export licence.

Huawei's 910C, a graphics processing unit (GPU), represents an architectural evolution rather than a technological breakthrough, according to one of the two people and a third source familiar with its design.

It achieves performance comparable to Nvidia's H100 chip by combining two 910B processors into a single package through advanced integration techniques, they said.

That means it has double the computing power and memory capacity of the 910B and it also has incremental improvements, including enhanced support for diverse AI workload data, they added.

All sources were not authorised to speak to media and declined to be identified. Huawei did not immediately respond to a request for comment.

Seeking to limit China's technological development, particularly advances for its military, Washington has cut China off from Nvidia's most advanced AI products including its flagship B200 chip.

The H100 chip, for example, was banned from sale in China in 2022 by U.S. authorities before it was even launched.

This has allowed Huawei and Chinese GPU startups such as Moore Threads and Iluvatar CoreX to go after what has primarily been a market dominated by Nvidia.

The U.S. Commerce Department's latest export curbs on Nvidia's H20 "will mean that Huawei's Ascend 910C GPU will now become the hardware of choice for (Chinese) AI model developers and for deploying inference capacity," said Paul Triolo, a partner at consulting firm Albright Stonebridge Group.

Late last year, Huawei distributed samples of the 910C to several technology firms and started accepting orders, sources have said.

Reuters was not able to ascertain which companies would be primarily producing the 910C.

China's SMIC 0981.HK is manufacturing some main components of the GPUs using its N+2 7nm process technology although its chip yield rates are low, a source has previously said.

At least some of Huawei's 910Cs use chips that were made by Taiwanese contract chip manufacturing giant TSMC for China-based Sophgo, according to one of the sources and a fourth person.

The Commerce Department has been investigating TSMC's work for Sophgo after one of its TSMC-made chips was found in a 910B processor.

TSMC made nearly three million chips in recent years that matched the design ordered by Sophgo, according to Lennart Heim, a researcher at RAND's Technology and Security and Policy Center in Arlington, Virginia, who is tracking Chinese developments in AI.

Sophgo did not immediately respond to a request for comment.

TSMC said it complies with regulatory requirements and it has not supplied Huawei since mid-September 2020.