The U.S. Has Lost the Battle: China Has Access to All the Chips It Needs to Develop Its Own AI, Analysts Say

The effectiveness of U.S. sanctions and those from allied nations is now under debate. These restrictions, first imposed in October 2022 by the Biden administration, were intended to prevent China from developing its own advanced integrated circuits and to block access to high-end chips produced by Western companies such as Nvidia, Intel, AMD, and Qualcomm.

For months, China has been importing advanced AI GPUs through secondary markets, including India, Malaysia, and Singapore, using intermediary companies. Now, however, there’s new insight. A report from SemiAnalysis, a consulting firm specializing in semiconductor analysis, provides detailed findings on China’s current chip industry.

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One of the report’s most revealing conclusions is that if the Chinese government wanted to, it could immediately build the world’s largest data center for training AI models. However, what people really want to know is whether China has the AI GPUs it requires to meet all its needs. And, according to this consulting firm, it does.

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As SemiAnalysis states, Nvidia’s most advanced AI chips enter China mainly from companies in the countries mentioned earlier. Their price is, predictably, higher than in standard markets. However, for Chinese companies, access to these high-end semiconductors justifies the cost.

But this is by no means China’s only trump card. Huawei plays a crucial role in its strategy to support the development of its AI infrastructure. The company now provides its Ascend 910C chip, an enhanced version of the Ascend 910B, which Huawei claims rivals Nvidia’s A100. This makes it likely that the 910C is even more powerful, offering Chinese companies a viable alternative to Nvidia hardware.

According to Reuters, ByteDance is reportedly preparing to train a new AI model using Huawei’s chips, reflecting Chinese tech companies’ growing interest in local solutions. As the South China Morning Post reports, Huawei rotating chairman Eric Xu Zhijun has confirmed that his company has launched two new divisions in the past five years to provide another option that can meet the AI infrastructure needs of enterprises. 

“The reality is that U.S. restrictions on AI chips for China are unlikely to be lifted anytime soon,” Xu said. However, he noted that this situation has created an opportunity for the company to offer computing resources through its cloud services.

Image | BoliviaInteligente (Unsplash)

More info | SemiAnalysis

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