China’s Sanctions Lead to a Deficit in AI Development Components

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According to the South China Morning Post, citing the government-controlled Chinese newspaper Economic Daily, China’s information technology industry is facing a deficit of necessary components for the development of artificial intelligence (AI) systems. This shortage, predominantly foreign-made, arises from a combination of high demand and restrictions on supply triggered by Western sanctions.

Image Source: NVIDIA

As per Chinese state media, the local industry is currently facing a severe lack of graphic processors, programmable matrices, and specialized accelerators, all of which are used to build the hardware infrastructure of AI systems. The development of large language models has been named by the Chinese authorities as a primary initiative aimed at enhancing national competitiveness.

Data from LatePost reveals that ByteDance, the Chinese company behind the social media platform TikTok, has spent more than $1 billion since the beginning of the year on purchasing NVIDIA graphics processors to develop infrastructure for its own chatbot. Baidu, also developing its AI platform, purchased over 10,000 NVIDIA accelerators in the same period, matching the demand level of US company Google (Alphabet).

Local startups estimate that there are at best 40,000 NVIDIA A100 accelerators available in China. Chinese companies are attempting to redistribute their existing stock of NVIDIA full accelerators according to their own development priorities. Since last year, NVIDIA has faced a US government ban on supplying China with accelerators equivalent to A100 and H100 in terms of performance. As a result, A800 and H800 accelerators were developed specifically for the local market, albeit with significantly lower performance.

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Martin Harris
I'm Martin Harris, a tech writer with extensive experience, contributing to global publications. Trained in Computer Science, I merged my technical know-how with writing, becoming a technology journalist. I've covered diverse topics like AI and consumer electronics, contributing to top tech platforms. I participate in tech events for knowledge updating. Besides writing, I enjoy reading, photography, and aim to clarify technology's complexities to readers.

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