00:00 Speaker A
We have received the news and you are actually just the right person to talk to about this.
00:04 Speaker A
So, the Journal reports that China has approved the purchase of Nvidia’s popular H200 AI chip for the first time.
00:13 Speaker A
Ah, Alibaba, ByteDance, they received their first approval batch.
00:18 Speaker A
Chris, you saw that headline, you saw that report. What do you think about it?
00:23 Speaker B
Well, I don’t think it’s surprising that China wants some amount of these chips. They have higher performance than Chinese chips that can be produced at home and are available in much larger sizes.
00:35 Speaker B
Hmm, the amount. Therefore, China’s leading companies really need these chips to deploy AI systems at scale.
00:41 Speaker B
But at the same time, I think China is really trying to become self-sufficient, or at least as close to self-sufficiency as possible, when it comes to AI chips.
00:54 Speaker B
Therefore, the Chinese government intends to continue its efforts to build its own uh chip ecosystem in order to break away from dependence on foreign, especially US chip suppliers.
01:05 Speaker A
What does Chris mean by the green lighting here? What does it tell us? What does this suggest about China today, you know, the strength of domestic AI chip companies?
01:15 Speaker B
Well, I think even objective estimates show that they’re far behind, especially in the amount of chips they can actually produce.
01:23 Speaker B
The best estimates we have are that the United States and its partners in Taiwan and South Korea will produce around 30 times as many AI chips as China this year.
01:34 Speaker B
This is a significant gap, especially given China’s desire to become one of the two largest players in the AI field.
01:42 Speaker B
So they know that China needs these chips. Ah, but they also know that they don’t want to rely on foreign chips in the long run. That’s why they are focused on improving the domestic chip manufacturing ecosystem.
01:54 Speaker B
I think it will still take some time before we can match Taiwan’s chip manufacturing capacity.
02:01 Speaker A
Not everyone knows, but you know, Chris thinks this is a very smart move, a very smart strategy. Well, not everyone thinks we should sell AI chips to China.
02:11 Speaker A
Anthropic CEO Dario Amodei, um, you saw this Chris recently. Here’s his take on this:
02:18 Speaker A
He says that’s wrong, he says this is crazy, he says it’s like selling nuclear weapons to North Korea.
02:26 Speaker A
What did you think about those comments?
02:29 Speaker B
Well, I think it’s true that chips will and are already being used for defense and intelligence applications.
02:37 Speaker B
The United States, China, and all the other world powers are doing it.
02:42 Speaker B
I think another aspect of the export control debate is what part of the technology stack you want to support.
02:47 Speaker B
Restricting U.S. companies’ chip sales to China would obviously be bad for U.S. chip companies, but enabling the next generation of Chinese model companies and cloud computing companies could pose challenges for Open AI, Microsoft, and AWS.
03:00 Speaker B
So the balance that we have to strike is to make sure that we certainly don’t want to be too punitive with the chip companies, but we also don’t want to give them the ability to allow Deep Seek or Alibaba or ByteDance to train the next generation of models and provide tough competition to U.S. companies.
