Driven by fears of new US export controls, the four Chinese internet giants Baidu, TikTok owner ByteDance, Tencent and Alibaba are investing heavily in the development of their AI divisions and generator systems. Accordingly, each of the online firms has ordered 100,000 A800 processors from US chip maker Nvidia for a total of four billion dollars (3.64 billion euros). The processors should be delivered by the end of the year, reports the Financial Times (FT). In addition, Chinese companies are said to have ordered graphics processors worth another four billion dollars.
Recently, the US restricted the export of high-performance chips to China due to security concerns. As a result, Nvidia is no longer allowed to export two of its high-performance chips for artificial intelligence, such as the A100 GPU, to the People’s Republic of China. This is the reason why the chipmaker is now offering the underpowered A800 processor for the Chinese market, as it conforms to export specifications. In addition, an order by US President Joe Biden has banned US investments in China in the semiconductor, sensitive intelligence systems and quantum information technology sectors.
Due to these restrictions, the Chinese internet giant is struggling to stock the A800 as it fears new export restrictions. “Without these Nvidia chips, we cannot train large language models,” a Baidu employee told the FT. Driven by the AI boom, Nvidia processors are in high demand around the world. That’s why the US group also criticizes the export rules: “In the long run, banning the sale of our AI chips to China will result in a permanent loss of opportunities to compete in one of the world’s largest markets.” And take over the leadership of the market. “This has implications for our future business and results,” said Collette Kress, Nvidia’s chief financial officer.
