Alibaba, Tencent Turn Down Nvidia’s Slower AI Chips: WSJ

Top Chinese cloud firms have told Nvidia they do not want its slower artificial intelligence chips, and that they would prefer using homegrown chips from companies such as Huawei, according to a report by the Wall Street Journal.

China’s Tencent and Alibaba told Nvidia that they will purchase only a few AI chips from the US chipmaker, WSJ said.

Those orders will be much smaller than those for Nvidia’s faster chips — like the A800 and H800 — exports of which were banned under expanded US export controls last year, it added.

Also on AF: Nvidia Launches Modified Gaming Chip For Chinese Market

The two firms have told Nvidia that they will be switching to domestic firms for some advanced chip orders, WSJ reported. They also plan to use more chips that they can “develop in-house”, the report added.

Nvidia has so far claimed a 90% share of China’s AI chip market, but rivals like Huawei are vying for a slice of that pie, betting that US chip export controls will only tighten over time.

That has meant that firms such as internet giant Baidu and Tencent, that rely on AI chips for their cloud services, are now looking to buy an increasing number of chips made at home.

Last year, following the US tightening its chip curbs in October, Baidu placed a $62 million order with Huawei for its AI chips.

For its part, Huawei has taken the lead among domestic rivals in developing homegrown AI chips.

Analysts and some Chinese AI firms like iFlyTek have said that the US sanctioned firm’s Ascend AI chips are comparable to Nvidia A100 in terms of raw computing power.

iFlyTek has been using the Ascend 910 to train its AI models.

According to the WSJ report, downgraded Nvidia chips have also translated into a narrower performance gap with Chinese chipmakers.

That has made domestically-developed chips “increasingly attractive” to Chinese buyers, WSJ said.

Among other firms signalling reduced interest in Nvidia’s chips are China’s top AI firms Baidu and TikTok owner ByteDance, WSJ said.

Also read:

China Firms Rush to Poach Nvidia Clients With AI Chip Offerings

US Curbs Set Off Sales, Tech Boom for China Chip Equipment Firms

Raimondo’s Nvidia Chip Warning, Vow of Firmer Curbs Irks China

US Chip Export Ban Seen as Big Opportunity for Huawei

Huawei, US-Sanctioned Firms Win as China Dumps Western Tech

Threat of More Chip Curbs Spurs Warnings on China Innovation

Chinese Chip Firms Closed at a Record Rate in 2023 – TH

 

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has been working as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a stock market trader and investor, she is keenly interested in economy, emerging markets and the intersections of finance and society. You can tweet to her @saxenavishakha