China's semiconductor industry may have found a way to manufacture advanced chips capable of powering 5G smartphones, but it still can't make chips powerful enough to run AI applications. And its reliance on chip imports, limited by U.S. bans, could put China's tech sector at a disadvantage in the race to dominate AI.
Chinese tech companies are limiting the use of AI services due to a lack of computing power caused by a chip shortage, reports The Information.
Livestreaming platform Kuaishou had to limit how many people could use a test version of its text-to-video model, Kling, to avoid running out of computing power. The company used Nvidia chips such as the A800 to train the model.
Moonshot AI, an AI startup recently valued at $3 billion, has also warned users of its popular chatbot that it may run out of computing power at peak times.
Alibaba, Baidu and ByteDance, which offer large-scale language model applications, are telling corporate customers who need heavy usage to wait their turn, according to The Information.
Kuaishou, Yueyang AI, Alibaba and Baidu did not immediately respond to requests for comment. A ByteDance spokesman said the company does not comment on “market rumors.”
U.S. tipping restrictions are working
Chinese companies are rushing to develop their own generative AI applications to gain an edge in the country's crowded consumer internet sector, but the companies that run these apps need access to the processors that power them.
The United States imposes strict export controls on the sale of AI-related chips, such as those made by Nvidia, to China.
Chinese companies have previously warned that the export bans were affecting their businesses. Alibaba blamed the U.S. export controls when it abandoned plans to spin off its cloud-computing unit in November. The e-commerce company said at the time that the restrictions “could have a significant and adverse effect” on its ability to serve customers.
While companies outside of China are scrambling to get their hands on Nvidia's new chips, Chinese companies are depleting their stockpiles as Biden administration rules effectively cut off China's access to high-performance AI chips made by companies like Nvidia and Qualcomm.
While Nvidia and other chipmakers are working to develop new products that comply with U.S. regulations, Chinese companies are reportedly not interested in the non-compliant chips.
Chinese companies such as Huawei are now working to develop domestic AI chips, but it remains unclear whether the industry can produce high-end semiconductors at scale. U.S. export controls also ban the export of advanced chip-making tools to China, and Washington is reportedly pressuring allies such as the Netherlands and Japan to further tighten the restrictions, including by suspending maintenance services as well.
