Chinese tech companies are gradually discovering how to adapt to the US crackdown on chip exports while catching up with the AI race. The main currency for expanding an AI data center is the graphic processing unit (GPU), and the best GPUs come from Nvidia, a US company now barred from trading with Chinese customers - or requires an export license to send its GPUs to China.
As reported by CNBC, Tencent, Baidu, and other tech firms have devised various workarounds for the US chip curbs, including stockpiling large quantities of US-made chips, developing more efficient AI models, and using homegrown chips from local semiconductor companies.
Tencent, the company behind WeChat, said it has a "pretty strong stockpile" of chips from previous purchases. This aligns with earlier reports suggesting that Chinese firms are stockpiling tons of US-made chips before Trump entered the White House.
The company also said it's been able to train AI models with fewer GPUs. "That actually sort of helped us to look at our existing inventory of high-end chips and say, we should have enough high-end chips to continue our training of models for a few more generations going forward," Tencent president Martin Lau said.
For Baidu, China's biggest domestic search engine, software optimization and focusing on developing more efficient AI models were the answers. The company touted the idea of Full-Stack, which includes cloud computing infrastructure, AI models, and the actual applications based on those models.
Meanwhile, China is making significant strides in ramping up domestic chip production, aiming to achieve total self-sufficiency. Huawei is leading the charge in developing domestic AI chips for China, with more firms like SMIC following suit.
One prominent example of China’s success in working around the US chip curb is DeepSeek, a Chinese AI chatbot that took the world by storm and could challenge its Western rivals. DeepSeek was launched while the US administration was tightening its grip on exporting chips to China.
The US crackdown on exporting chips and sensitive technology to China began in Donald Trump's first term as POTUS (2016 - 2020). China's torchbearer tech firm, Huawei, was sanctioned by the US at the time due to its suspicious ties with the Chinese government. In addition to losing access to Western chips, Huawei was also banned from using the Android ecosystem.
Since then, Chinese companies have faced difficulties accessing advanced chips. This situation did not improve during the Biden administration, and with Trump's return to the White House, even more restrictions were imposed on chip exports to China. For example, Nvidia was banned from selling China-specific H20 chips to its Chinese customers and had to start working on an all-new Chip for that market.
14 Comments - Add comment