China’s AI companies are reportedly running out of resources due to a chip shortage
China’s chip industry may have found a way to make an advanced chip that can power a 5G smartphone, but it is currently unable to make the chip capable of running AI applications. And that reliance on chip imports, limited by the US ban, may now put China’s tech sector at a disadvantage in the race to dominate AI.
Chinese tech companies are limiting the use of their AI services due to a lack of computing power, caused by a shortage of chips, reports Information.
One firm, live-streaming platform Kuaishou, had to limit the number of people who could use a test version of Kling, its text-to-video model, to avoid a lack of computing capacity. The company used Nvidia chips, such as the A800, to train its model.
AI startup, Moonshot AI, recently revealed a $3 billion valuation, and warns users of its popular chatbot that computing power may not be enough during peak hours.
Alibaba, Baidu, and ByteDance—all of which offer large-scale language modeling applications—are telling corporate customers that they need to be used harder to wait in line, according to Information.
Kuaishou, Moonshot AI, Alibaba and Baidu did not immediately respond to a request for comment. A spokesperson for ByteDance said the company would not comment on “market rumors.”
US chip controls have an effect
Chinese companies are rushing to develop their own AI applications to stay ahead in the country’s highly competitive consumer internet sector. However, companies using these applications will need access to processors that can power them.
The US imposes strict export controls on the sale of AI-related chips, such as those made by Nvidia, in China.
Chinese companies have previously warned that the ban on exports is affecting their business. Alibaba blamed US export controls when it abandoned its plan to spin off its cloud computing unit last November. At the time, the e-commerce company said the restrictions “may adversely affect” its ability to serve customers.
As non-Chinese firms scramble to get their hands on Nvidia’s new chips, Chinese companies are instead using their stockpiles, as Biden’s rule effectively cuts off China’s access to high-end AI chips made by companies like Nvidia and Qualcomm.
While Nvidia and other chip makers are working on new products that comply with US regulations, Chinese companies reportedly don’t like these watered-down chips.
Chinese firms such as Huawei are now working to develop domestically produced AI chips, but it is not yet certain whether the industry can produce high-quality semiconductors at a high level. US export controls also prevent the export of advanced tool-making equipment to China, and Washington is reportedly pressuring allies such as the Netherlands and Japan to tighten controls further by suspending maintenance services.
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