Chinese companies have abandoned purchasing the latest chipsets from the American company Nvidia, which they developed specifically for the Chinese market with modest capabilities, consistent with the restrictions imposed by the US government on sales of advanced chipsets to China, in favor of locally manufactured alternatives.
According to the newspaper “Wall Street JournalThe major Chinese companies for cloud services, such as “Alibaba” and “Tencent”, which have been testing experimental Nvidia chip models directed to the Chinese market since last November, expressed their dissatisfaction with the level of performance of the models, indicating that they will reduce the targeted orders. Purchased from the American company’s segments.
The continuous reduction in the capabilities and capabilities of Nvidia chips has narrowed the gap in performance between it and the chips manufactured locally in China, making the latter more attractive to major companies, as a result of the convergence of performance and lower cost.
Local alternatives
Alibaba and Tencent have already begun to test local alternatives to Nvidia chips, such as those provided by Huawei, as well as to engage in the experience of manufacturing chips for those companies internally.
Informed sources confirmed that Baidu and TikTok developer ByteDance have begun to take the same approach regarding the chips used in training and operating artificial intelligence models.
The report indicated that Chinese companies have begun to prepare future strategies that do not rely primarily on Nvidia chipsets, especially after the US government’s statements last October, that it will continuously work to tighten the screws by permanently amending its laws related to exporting advanced chipsets to the Chinese market.
The Wall Street Journal said that Chinese companies will try to make their strategies provide a more stable work environment, so that they do not need to modify their operating method to accommodate the continuous changes in the segments used.
It is noteworthy that China constitutes a fifth of the total sales of Nvidia chipsets globally, and according to the Wall Street Journal, Chinese companies in the cloud services market depend on Nvidia to obtain 80% of their silicon chip needs, and it is expected to give up 50% to 60% of this. rate over the next five years.
For its part, Nvidia confirmed that its revenues were not affected by the decline in demand for its chips in China, indicating that it will be able to create new demand in other markets. However, the company’s chief financial officer, Colette Chris, confirmed last year that in the long term, the United States will lose its leadership in the market. chipsets, if American restrictions on Nvidia chipsets continue.
Huawei is back
While Chinese companies have been testing Nvidia’s experimental H20 chip since the end of last year, those companies realized that they needed a large amount of chips to get the same performance as the American company’s chips, which are banned from being sold to China, which reflected the strength of the local alternative offered by Huawei.
The Chinese giant, which Nvidia director Jensen Huang considers a “strong competitor” in the chipset market, succeeded during 2023 in selling at least 5,000 chips of the Ascend 910B artificial intelligence chip to giant Chinese companies, including at least 1,000 chips to Baidu.
The Huawei chip dedicated to training artificial intelligence models is the local alternative closest in terms of performance to Nvidia’s leading A100 chip.
It is expected that the production process for Huawei’s smart chip will be expanded further in 2024, as the Chinese company faces production problems due to increasing American restrictions.
But that did not prevent Chinese technology companies from relying on Huawei chipsets. China Telecom bought chipsets from the company worth $390 million last October, while China Unicom paid $20 million in 2022 to obtain the chipsets of the Chinese giant, in addition to a number of bodies. Chinese government.
The Wall Street Journal report indicated that Huawei aims to introduce new chips for artificial intelligence by the second half of this year.
2024-01-07 21:20:37
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