Thursday, 24 April 2025
26.8 C
Singapore
29.9 C
Thailand
19.5 C
Indonesia
28.8 C
Philippines

US chip ban challenges Chinese tech giants

Chinese companies are preparing for adjustment and innovation to navigate these new constraints in response to the shortage and rising prices of the earlier chips, the H800 and A800.

Chinese technology leaders like Alibaba Group Holding and Tencent Holdings face challenges due to the recent US restrictions on AI chip exports. Their CEOs have disclosed the potential effects on their cloud computing operations in third-quarter earnings. Specifically, these controls hinder the sale of advanced semiconductors and chip-making equipment to China, impacting the core technology needs of these firms.

Alibaba, an e-commerce giant, announced the cancellation of a full spin-off of its cloud computing unit. This decision reflects the uncertainties brought about by the US’s stringent rules on certain AI chips. Tencent, known for its stronghold in social media and video gaming, also expressed concerns over the constraints these restrictions impose on their cloud services, specifically in leasing AI chips to customers.

Strategies to overcome the restrictions

Both Alibaba and Tencent are proactively seeking ways to mitigate the impact of these controls on their business growth. Alibaba’s CEO, Eddie Wu Yongming, mentioned that they would diversify their chip sources and shift towards using a variety of graphics processing units (GPUs) instead of relying solely on central processing units.

Tencent’s president, Martin Lau Chi-ping, revealed that Tencent has amassed one of China’s largest AI chip inventories, including Nvidia’s H800 GPUs, tailored explicitly for the Chinese market. However, exports of these chips have been banned under the new US regulations. Lau indicated that Tencent would optimise the use of its AI chip supply by reallocating tasks to different performance-level chips.

Broader impact and future outlook

The tightening of US export controls follows Huawei Technologies’ release of a 7-nanometre processor for its latest 5G handset. This development, alongside China’s aggressive pursuit of AI technologies, including its own versions of ChatGPT-like services, has prompted the US to implement more stringent rules.

The future appears challenging for China’s AI industry due to these restrictions. Analysts predict a significant slowdown in China’s development of large AI models. Additionally, the demand for high-end AI servers from Chinese tech giants is expected to decrease, affecting global market shares.

Despite these challenges, Chinese cloud service providers are likely to hasten their efforts in stockpiling and developing independent AI chips. Concurrently, US GPU suppliers, such as Nvidia and Advanced Micro Devices, adapt by introducing products compliant with the new regulations. Nvidia has already developed three new data-centre GPUs for the Chinese market, with the first shipment anticipated by the year’s end.

Hot this week

Intel’s new CEO reshapes leadership, promotes AI chief and plans closer work with engineers

Intel CEO Lip-Bu Tan is reshaping leadership, promoting a new AI chief, and aiming for a leaner, more engineering-driven company.

YouTrip adds a Malaysian Ringgit wallet to help you save more on JB trips

YouTrip now lets you store MYR and offers free JB shuttles and cashback to celebrate, making your trips across the Causeway more rewarding.

OpenAI introduces Flex processing to cut AI costs for slower tasks

OpenAI launches Flex processing, cutting AI usage costs by 50% for non-urgent tasks using o3 and o4-mini models with slower response times.

Anbernic stops US shipments amid rising tariff concerns

Anbernic halts US shipments due to rising tariffs, urging customers to order from its US warehouse to avoid high import duties.

OpenAI introduces powerful new AI models with advanced image reasoning

OpenAI’s new o3 and o4-mini AI models bring powerful image reasoning and full tool access to ChatGPT Plus, Pro, and Team users.

POCO launches entry-level C71 smartphone in Singapore with premium features

POCO launches the budget-friendly C71 smartphone in Singapore, offering premium design, enhanced cameras, and smooth performance at S$109.

NVIDIA uses AI to address climate, wildlife and disaster risks

NVIDIA’s AI tools support climate action, wildlife monitoring, and disaster risk mitigation, with uses spanning sea, land, sky and space.

Netflix raises subscription prices in Singapore again

Netflix again raises subscription prices in Singapore, with new rates for all plans and extra member slots.

GameMax unveils Blade Concept ATX case with bold design and powerful features

GameMax launches the Blade Concept ATX case, which features a striking blade design, RGB lighting, and support for high-end liquid-cooled PC builds.

Related Articles

Popular Categories