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On Tue, 8 Oct, 8:02 AM UTC
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Chinese think tank advises data centers to stick with Nvidia AI GPUs -- homegrown Chinese GPUs suffer from 'high costs' and 'complex engineering'
On Sunday, the Chinese-government-backed research institute and think tank CAICT issued a detailed report regarding China's computational power. The report (vias SCMP''') warned data centers to keep on using Nvidia-based solutions. The institute cited 'high costs' and 'complex engineering' as one of the few hurdles that data centers would face if they were to transfer their models to Chinese chips. It should not be surprising that the US government has barred Nvidia from exporting its high-performance A100 and H100 GPUs to China. Another round of GPU bans came last year when the Biden Administration restricted exports of Nvidia's A800 and H800 alternatives to China for obvious reasons. Furthermore, it appears that Nvidia has also stopped taking orders for its currently permitted HGX H20 GPU. "As the saying goes, "Necessity is the mother of invention," and likewise, many domestic Chinese chip manufacturers have taken this issue into their own hands. However, despite the clear incentive any Chinese data center would have to opt for a local alternative, CAICT advises continuing with Nvidia. "The CAICT stated that "it involves complex engineering to transfer models trained on Nvidia GPUs to domestic solutions due to differences in hardware and software." "Adding to the mix, new data centers in China face numerous problems, including the lack of GPU solutions, supply mismanagement, and rising computing power fragmentation, which essentially refers to the inefficient use of computer resources like a GPU. Data centers must merge solutions from different vendors and play a "mix-and-match" game, hoping to get their systems up and running. A large portion of this inefficiency is caused by incompatible software and varying hardware. CAICT warned that "there are big discrepancies on hardware in IDCs, such as in GPUs, AI accelerators and network structures, which made it harder to manage and dispatch hardware resources to accommodate for differential computing needs of AI tasks, further impeding the use rate." While CAICT has suggested Chinese data centers avoid trouble by sticking with Nvidia, the large gap between supply and demand remains unaddressed. China's goal of self-sufficiency in the semiconductor market is still a "work in progress" as the country, despite investments worth tens of Billions of dollars, still imported $350 Billion of chips in 2023. Players like Intel and AMD are struggling to keep pace with Nvidia due to Team Green's strong integration between hardware and software in the AI market, so homegrown Chinese GPUs might, at best, achieve parity in a few years.
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Tech war: China advocates use of local AI chips over those from US powerhouse Nvidia
NVIDIA's CEO Jensen Huang displays products on-stage during the annual Nvidia GTC Artificial Intelligence Conference at SAP Center in San Jose, Calif. March 18. AFP-Yonhap Chinese authorities have informally advised local companies to use domestic-made artificial intelligence (AI) chips over those from Nvidia, according to two sources familiar with the matter, as alternative suppliers on the mainland look to catch up with the U.S. tech giant. While there is no official ban on Nvidia's China-tailored H20 graphics processing unit (GPU), the sources said mainland AI chip users have been informed to prioritize deployment of local alternatives, including those developed by Huawei Technologies. A third source said H20 orders made by mainland enterprises had not been restricted as of August. Reports about China's tacit rules against the American chip design firm first emerged in May, when US tech media The Information reported that regulators had asked local companies to cut back purchases of Nvidia chips and buy more from domestic suppliers like Huawei. A Bloomberg report last week said that China has called on local buyers to stay away from Nvidia. The country's Ministry of Industry and Information Technology, which oversees the domestic semiconductor and AI sectors, has not made any public announcement regarding that matter. The agency did not reply to a request for comment. Nvidia did not also respond to a request for comment on the reported China restrictions. The lack of any official confirmation about the matter somehow reflects the highly sensitive nature of the world's AI chip market, which Taiwan Semiconductor Manufacturing Co chief executive Hsu Ming-chi has projected to grow annually at a much higher rate than the overall semiconductor industry. When asked about his views on U.S. trade restrictions on China, Nvidia chief executive Jensen Huang told American media in Washington on Sept. 28 that the U.S. government is "doing a wonderful job" in finding the right balance between controls and exporting American technology to the world. "It is really terrific that the world is built on American standards," Huang said, "Nvidia is an American company and our government and administration would love to see us succeed." Nvidia's H20 remains popular among users in China, despite its reduced capacity to comply with U.S. sanctions. Sales of the tailor-made chip have steadily picked up since its release earlier this year, as demand from large Chinese cloud services providers enabled them to access Nvidia's technical support and maintenance services. Nvidia is expected to deliver more than 1 million H20 GPUs in China this year, racking up $12 billion in sales. The company logo of China Telecom is displayed at a news conference in Hong Kong, China, Aug. 20, 2018. Reuters-Yonhap Still, adoption of alternative Chinese-made AI chips is growing. State-owned carrier China Telecom, for example, said in a statement on September 28 that it has developed two large language models -- the technology behind generative AI applications like ChatGPT -- that were trained entirely on locally produced AI chips. While it did not identify the local supplier, China Telecom has a track record of partnering with Huawei. A week earlier, Huawei had started offering samples of its Ascend 910C processor to large Chinese server companies for hardware testing and configuration, according to a South China Morning Post report. That put the company a step closer to the commercial roll-out of its upgraded version of the 910B, which is on par with Nvidia's popular A100 chips. Nvidia was initially barred from selling its A100 and H100 GPUs -- two of the most in-demand chips for training and running AI models -- to clients in China in August 2022. It later modified those chips to create the A800 and H800 to get around those restrictions, which Washington barred from being exported to China under tightened curbs announced last October. Nvidia has since developed the H20, L20 and L2 GPUs to maintain its market share in China. Despite several rounds of U.S. restrictions, Nvidia said China was its third-largest market in its financial year ended January 28. Read the full story at SCMP.
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China pushes local companies to not buy AI chips from NVIDIA
A new report has cited two anonymous sources familiar with the matter that Chinese authorities have told local companies to avoid purchasing NVIDIA AI chips. The report comes from the South China Morning Post and states that Chinese authorities have told local companies they should be choosing Chinese AI chip solutions over NVIDIA's products, which would include AI chips developed by Huawei Technologies. Notably, China hasn't officially banned NVIDIA-made GPUs, but as a result of the demand for GPU processing power fueled by the emergence of artificial intelligence, an export ban was placed on high-end chips, causing NVIDIA to create a China-specific H20 GPU in order to be able to sell its product across the region. This isn't the first time we have heard of China asking local companies to opt for locally-made chip solutions, as it was back in May that The Information published a story that detailed Chinese regulators asking companies to reduce their purchasing number of NVIDIA GPUs. Additionally, it was only last week Bloomberg reported China asked local buyers to avoid NVIDIA. It's clear from this timeline that Chinese authorities want complete control over the AI chips within its country, seemingly meaning that NVIDIA, an American company, has a limited timeline of being able to trade in China. However, that won't likely happen until Chinese chip developers such as Huawei catch up to the performance NVIDIA products can provide.
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Chinese authorities are advising local companies to prioritize domestic AI chips over NVIDIA's, despite challenges in transitioning from the U.S. tech giant's products. This move reflects China's push for technological self-reliance amidst ongoing trade tensions with the United States.
In a significant move that could reshape the global AI chip market, Chinese authorities have reportedly begun advising local companies to prioritize domestic artificial intelligence (AI) chips over those produced by U.S. tech giant NVIDIA. This informal guidance comes as China seeks to bolster its technological self-reliance amidst ongoing trade tensions with the United States 12.
NVIDIA, a dominant force in the AI chip market, has faced increasing restrictions on its high-performance GPU exports to China. The U.S. government has barred the export of NVIDIA's A100 and H100 GPUs to China, prompting the company to develop China-specific alternatives like the H20 1. Despite these efforts, NVIDIA's CEO Jensen Huang has publicly supported the U.S. government's approach, stating that they are "doing a wonderful job" in balancing controls and exporting American technology 2.
The Chinese Academy of Information and Communications Technology (CAICT), a government-backed think tank, has highlighted significant challenges in transitioning away from NVIDIA's solutions. Their report cites "high costs" and "complex engineering" as major hurdles for data centers considering a switch to Chinese chips 1. The think tank warned that "there are big discrepancies on hardware in IDCs, such as in GPUs, AI accelerators and network structures, which made it harder to manage and dispatch hardware resources" 1.
Despite these challenges, adoption of Chinese-made AI chips is growing. State-owned carrier China Telecom recently announced the development of two large language models trained entirely on locally produced AI chips 2. Huawei Technologies, a key player in China's chip industry, has begun offering samples of its Ascend 910C processor, which is reportedly on par with NVIDIA's popular A100 chips 2.
This push for domestic AI chips reflects China's broader strategy to achieve semiconductor self-sufficiency. Despite significant investments, China still imported $350 billion worth of chips in 2023 1. The country's efforts to develop competitive AI chips could have far-reaching implications for the global tech industry and international trade relations.
While Chinese authorities are encouraging the use of domestic chips, NVIDIA's products remain popular in China. The company is expected to deliver more than 1 million H20 GPUs in China this year, potentially generating $12 billion in sales 2. However, the long-term outlook for NVIDIA's presence in the Chinese market remains uncertain as domestic alternatives continue to improve and government pressure increases 3.
As this situation unfolds, it highlights the complex interplay between technological advancement, economic policy, and international relations in the rapidly evolving field of artificial intelligence.
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China is encouraging its local AI companies to steer clear of Nvidia's advanced chips, pushing for the development and use of domestic alternatives. This move comes amid ongoing tensions between China and the US over technology access.
3 Sources
3 Sources
Chinese AI companies are finding ways to access Nvidia's high-end AI chips despite US export restrictions. They are using cloud services and brokers to obtain these chips, raising questions about the effectiveness of the export controls.
3 Sources
3 Sources
Huawei has begun sampling its new Ascend 910C AI chip to major Chinese tech companies, positioning itself as a potential alternative to NVIDIA in the face of US trade restrictions. This move signals China's push for technological self-reliance in the AI chip market.
5 Sources
5 Sources
Nvidia is reportedly working on a modified version of its advanced H100 AI chip for the Chinese market, aiming to comply with U.S. export controls while maintaining its position in the lucrative Chinese AI sector.
22 Sources
22 Sources
Despite U.S. export controls, Chinese companies are obtaining Nvidia's advanced Blackwell AI chips through intermediaries in nearby countries, highlighting the challenges in enforcing tech sanctions.
2 Sources
2 Sources
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