Beijing is souring on Nvidia.
China, which used to be one of Nvidia’s largest markets, seems largely conflicted about reaccepting Nvidia’s lower-tech H20 chips that Trump administration finally allowed to resume sales of in July. The Chinese tech industry might be excited about the Nvidia chip flow resuming, but the government is allegedly not.
Chinese authorities have discouraged local tech companies from purchasing Nvidia chips citing national security concerns, and even questioned industry titans like Tencent over their purchases of Nvidia chips, according to Reuters.
In response, tech giants like Alibaba and Baidu have begun using their own chips to train smaller AI models, the Information reported on Thursday, but they will reportedly continue to use some Nvidia chips.
“The competition has undeniably arrived,” an Nvidia spokesperson told Gizmodo. “Customers will choose the best technology stack for running the world’s most popular commercial applications and open-source models. We’ll continue to work to earn the trust and support of mainstream developers everywhere.”
Chinese development is ramping up. China chip stocks have experienced a major boom so big that the Beijing-based company Cambricon had to warn investors recently. Tech giants like Huawei and Alibaba are leading the push, but smaller companies are also making strides.
Shanghai-based tech company MetaX told the Wall Street Journal last month that it’s preparing to start mass production of a new chip that has bigger memory than Nvidia’s H20.
Still, largely no chip offering so far has been considered completely up to par with Nvidia’s best offerings. Reuters reported last week that top Chinese tech firms like Alibaba and ByteDance are still very keen to get their hands on Nvidia chips. That’s despite the fact that the Nvidia chips that are being sold to China are downgraded versions of existing models, developed to abide by U.S. exports restrictions.
The chips saga
Some experts in Washington think any supply of American tech to China has sizable national security risks attached to it. They also claim the chips can assist China in outpacing American AI innovation.
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