Chinese big tech companies are starting to develop artificial intelligence (AI) using domestic chips as the import of NVIDIA's AI chips has been blocked.
The Financial Times reported on the 30th, citing industry sources, that Alibaba, Tencent, and Baidu have begun testing products to replace NVIDIA's AI chips to meet the surging demand for AI.
The Trump administration restricted the export of NVIDIA's AI chips (H20) to China on April 9 to curb the development of AI technology in China. Industry sources noted that the NVIDIA chips currently held by Chinese big tech companies can only be utilized for AI development until early next year.
NVIDIA announced it is seeking to develop other products to compete in the Chinese market, but it remains uncertain whether it can supply new AI chips that are competitive with products from Chinese companies like Huawei while complying with the enhanced export regulations of the Trump administration.
Baidu's AI cloud division head, Sen Duo, told securities analysts last week that a variety of chips could be selected to replace NVIDIA's chips in problem-solving related to AI training. He said, “Over time, self-sufficient chips developed in China and efficient software will lay a strong foundation for innovation in the Chinese AI ecosystem.”
Alibaba's CEO, Wu Yongming, stated during a recent earnings announcement that the company is actively seeking various solutions to respond to the increasing demand for AI. Tencent's President, Liu Chiping, also mentioned that they are considering alternatives while improving chip usage efficiency.
The China Modern International Relations Institute, a think tank under the Ministry of State Security, recently posted on social media that while the U.S. export control was painful, it triggered innovation in China’s high-performance AI chip field, such as Huawei's Ascend chip series. It added that corporations in China have already been purchasing and using Ascend chips in bulk.
GF Securities recently reported that NVIDIA could begin production of next-generation chips for export to China that comply with U.S. regulations in early July. Furthermore, the new chips are based on NVIDIA's advanced Blackwell products but are expected not to include high bandwidth memory (HBM), a key component that enhances computing power.
However, if Chinese big tech companies were to switch their systems from existing NVIDIA chips to Chinese-made products like Huawei, the expense would be significant, and the process would take considerable time. One big tech executive predicted that switching to Huawei products would result in a halt of AI-related development for about three months.
In response, most Chinese tech companies are reported to be considering a hybrid approach, continuing AI training with their existing NVIDIA chips while using domestic chips in the rapidly growing inference sector.
Chinese big tech companies are also testing chips from other domestic companies such as Cambrian and Haigon, in addition to Huawei. Baidu and Alibaba are pursuing their own chip development to meet the growing demand.
Earlier, on the 23rd of last month, the South China Morning Post reported that the Chinese AI company iFlytek unveiled an inference AI model trained solely with Huawei's chips. Liu Qingfeng, the founder of iFlytek, stated at the time that the efficiency of Huawei's '910B' AI chip for training was only at 20% of NVIDIA's chips by the end of last year, but through collaboration, the two companies raised it to nearly 80%.