The majority of China’s Big techs are likely to be affected by the US chip ban
A US order prohibiting the export of experts in some advanced AI chips to China is likely to affect almost every major big tech company in the country that uses public clouds or advanced artificial intelligence training modules. Nvidia Corp, a chip designer, stated that US officials told it to stop exporting two top computing AI chips to China. According to Shu Jueting, a Chinese Commerce Ministry spokesperson, Beijing opposes the measures because they undermine Chinese companies’ rights and threaten global supply chains. The orders highlight the growing tension between the United States and China over access to advanced chip technology.
A finance and strategy consulting firm went from blocking certain US companies from supplying a specific company, as was the case with Huawei, to banning certain US products from selling to China, period. The worst-case scenario would be Washington broadening the ban to prohibit contract chipmakers such as Taiwan Semiconductor Manufacturing Co and Samsung from manufacturing chips for Chinese chip designers. We’re not there yet, and the US will most likely assess the effectiveness of each incremental step before taking drastic action. The latest ban will likely affect a slew of big Chinese tech giants, including Alibaba Group Holding Ltd, Tencent Holding Ltd, Baidu Inc, and Huawei Technologies Co Ltd.
Affected companies could use cloud services from Alphabet Inc’s Google or Amazon.com Inc’s AWS to develop artificial intelligence software and export it back to China, or they could use multiple lower-end chips to replicate the processing power of the banned, high-end chips. According to one former senior AMD employee in China, the restrictions will not prevent Chinese big tech companies from advancing their AI research but will make it more expensive and inefficient in the short term.
It affects resources. They will continue to work on the same projects and make progress; it will simply slow them down. Alibaba, Tencent, or Baidu did not immediately respond to Reuter’s requests for comment. Huawei has refused to comment. Washinton’s target Nvidia and AMD chips are used for artificial intelligence and machine learning applications, specifically building training models for tasks like natural language processing. These modules may also be helpful to militaries in modeling bomb simulations and weapon design. Few Chinese companies can quickly offer chips to replace those of AMD and Nvidia, and the restrictions will likely spur more funding for domestic chip startups to close the gap with US firms. Several startups in China aspire to make chips that can compete with Nvidia and AMD. Many were founded by former employees of those companies, though few have achieved significant scale.
Hygon Information Technology Co and Loongson Technology Corp, both Chinese AI chip makers, saw their shares rise 10% and 6%, respectively. Biren, a company founded by Nvidia and Alibaba alumni, unveiled a 7nm chip last week, which experts say represents significant progress for China’s chip sector. Several dozen Chinese chip companies are working on various types of AL accelerators, and their order books will be filled tomorrow.