U.S. Restrictions Spur Domestic Growth in China's AI Chip Market
Summary:
The Chinese artificial intelligence (AI) chip market faces ongoing export restrictions from the U.S., blocking sales of specific products like top-grade chips from Nvidia and AMD. Despite the restrictions, Nvidia plans to release three new chip models for the Chinese market. As a response to foreign regulations, Chinese firms are increasingly sourcing from domestic chip manufacturers. Baidu, for example, ordered 1,600 AI chips from Huawei as Nvidia alternatives. The U.S., however, continues its plight looking to further limit China's tech growth by adding restrictions on China’s access to cloud computing services.
Since October 2022, China's artificial intelligence (AI) chip market has been grappling with persistent export limitations, enforced by the United States. These restrictions ban the sale of specific U.S. products, including top-tier chips from companies like Nvidia and AMD, to China. Despite the initial controls in October, companies could still ship other models like Nvidia’s A800 and H800 to China. However, on October 17, a year later, the U.S. government expanded its regulations to encompass all chip models, effectively embargoing them from the Chinese marketplace. Nvidia's L40S gaming chip was not spared by these recent export restrictions, effective from October 24. But on November 9, STAR Market Daily, a local Chinese media outlet, stated Nvidia intends to unveil three new chips for the Chinese market, named the HGX H20, L20 PCIe, and L2 PCIe, according to insiders. An announcement from Nvidia could come as early as November 16. Despite attempts to contact Nvidia for further confirmation, no response has been forthcoming. Based on Nvidia's earlier quarterly report, China ranks as one of its biggest markets, alongside Taiwan and U.S. Alongside this, Chinese corporations are increasingly relying on local chip producers. On November 7, Reuters revealed that Chinese tech giant Baidu had procured AI chips from Huawei in August. Reportedly, Baidu ordered 1,600 of Huawei’s 910B Ascend AI chips, intended as a substitute for Nvidia’s A100, for 200 servers. By October, Huawei had met over 60% of Baidu’s order, translating to roughly 1,000 chips worth an estimated 450 million yuan ($61.83 million). The remainder is due by year-end. Baidu, one of China's premier AI firms, launched its Ernie 4.0 AI system in October, boasting performance comparable to ChatGPT. The Biden Administration over the summer hinted at further constraints on China's access to cloud computing services. Just last week, Alan Estevez, the U.S. Undersecretary of Commerce for Industry and Security, echoed this apprehension at a Tokyo event, specifically cautioning against potential military use.
Published At
11/9/2023 1:50:14 PM
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