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China AI The Internet Hardware

China's Internet Giants Order $5 Billion of Nvidia Chips To Power AI Ambitions 31

Posted by BeauHD from the supply-and-demand dept.
According to the Financial Times, China's internet giants have ordered more than $5 billion worth of high-performance Nvidia chips for building generative AI systems. Reuters reports: Baidu, TikTok-owner ByteDance, Tencent and Alibaba have made orders worth $1 billion to acquire about 100,000 A800 processors from the U.S. chipmaker to be delivered this year, the FT reported, citing multiple people familiar with the matter. The Chinese groups had also purchased a further $4 billion worth of graphics processing units to be delivered in 2024, according to the report.

The Biden administration last October issued a sweeping set of rules designed to freeze China's semiconductor industry in place while the U.S. pours billions of dollars in subsidies into its chip industry. Nvidia offers the A800 processor in China to meet export control rules after U.S. officials asked the company to stop exporting its two top computing chips to the country for AI-related work. Nvidia's finance chief said in June that restrictions on exports of AI chips to China "would result in a permanent loss of opportunities for the U.S. industry", though the company expected no immediate material impact.
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China's Internet Giants Order $5 Billion of Nvidia Chips To Power AI Ambitions More

China's Internet Giants Order $5 Billion of Nvidia Chips To Power AI Ambitions

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  • Greed (Score:3)

    by christoban ( 3028573 ) on Thursday August 10, 2023 @09:43PM (#63757914)

    China can always count on our greed to destroy us. It was steel for the Japanese, everything now that we let them corner manufacturing.

    • That's how capitalism works. We decided 30 years ago that we wanted to exploit the cheap labour of China, and also turn them into the world's largest consumer market.
      We've done that, so I'm not sure why the US government is so worried. Don't they like capitalism?

      • No, it's not "how capitalism works." We can just prohibit them from selling those chips to China. We do that all the time.

        • Re: (Score:1)

          by AmiMoJo ( 196126 )

          That's very much how capitalism works - turn everyone into consumers for maximum profit. That means making sure they have the money to buy stuff.

          The danger is that if a chip ban really starts to hurt China and they can't find alternatives, it makes Taiwan an increasingly attractive target. At the moment we have a kind of MAD going on, where the West is dependent on Taiwan for high end silicon, and China is dependent on the West for trade. An escalating trade war, or Europe and the US developing domestic hig

          • So in your mind, the whole concept of laws and regulations don't exist at all? Capitalism can only happen in the purest form?

            I'm getting really tired of arguing with children only capable of casting the world in the simplest possible terms. First, some idiot is trying to tell me that cops don't prevent minor crimes all the time, now you, casting capitalism as an absolute.

            And you both just keep digging your holes.

            • Capitalism is an absolute. It's an ideal and, like any ideal, it's not something which can be attained in the real world. Maybe what you meant to say was, "That's not how a capitalist economy works." because a functioning economy is, of course, never going to be purely capitalistic.

              You may claim that this is nitpicking, but given the extremism which has taken over almost any political discussion nowadays I don't think it is. Think about all the people who claim that we don't have a democratic system beca

    • "corner manufacturing"? They couldn't manufacture anything resembling the Nvidia chips, and are having to buy $9 billion worth of third-rate components while they can still get them.

      • Re: (Score:2)

        by ls671 ( 1122017 )

        Interesting, I was wondering how much it would cost to build a factory instead :)

      • They couldn't manufacture anything resembling the Nvidia chips,

        They absolutely have the ability to manufacture these chips, many times over. SMIC has 5nm capability (or at least it claims it has) and despite political antagonism, has strong trade links with taiwan (That, by the way, is the reason china hasn't invaded. Everyone rattles their sabres for local audiences, but as long as taiwan trades freely between the east and west, the status quo works for everyone)

        • "absolutely have the ability to manufacture these chips", that seems so very unlikely since they are buying $9 billion worth of third-rate components, but you are welcome to show evidence.

          • Re: (Score:1)

            by guruevi ( 827432 )

            Third rate components? The A800 are A100-80G with a BIOS limiter, the ONLY limit is how many you can put in a single machine and NVLink together (8 instead of 12) but they have the same 80GB of memory, same floating point performance, which they are selling at a discount (1B / 100k = 10k/unit, the A100-80G retails at ~15k).

            I have seen very few machines or applications that can handle more than 4 GPU.

            • I didn't say it wasn't a powerful chip, I said it was third rate.

              "the A800 processor in China to meet export control rules after U.S. officials asked the company to stop exporting its two top computing chips"

              • Re: (Score:1)

                by guruevi ( 827432 )

                It’s the EXACT SAME as a A100, the flagship of the series. Yes, they say they have some restrictions, practically speaking there are no restrictions because our government is incompetent, you can flash these cards with an A100 firmware, and except for the labels, nothing is different.

                A truly restricted or third rate chip would be only being allowed to ship a GPU but disable CUDA support.

        • They couldn't manufacture anything resembling the Nvidia chips,

          They absolutely have the ability to manufacture these chips, many times over. SMIC has 5nm capability (or at least it claims it has) and despite political antagonism, has strong trade links with taiwan (That, by the way, is the reason china hasn't invaded. Everyone rattles their sabres for local audiences, but as long as taiwan trades freely between the east and west, the status quo works for everyone)

          SMIC has tried to buy (make an offer that couldn't be refused) key TSMC people. That has worked. However, SMIC also needs ASML et al. equipment, and that hasn't worked due to the US-led boycott. So, SMIC has no real leading edge capability.

          Taiwan's trade with China is strong. [In 2022] [economist.com] China accounted for 25% of Taiwan’s exports and 20% of its imports. However, the reason that China hasn't yet invaded Taiwan is not due to that trade, which for China is relatively small.

          First, China has been keepi

      • Virtually everything. China is still the manufacturing center of the world, despite losing a little steam lately.

        • China sure isn't manufacturing cutting edge semiconductors, and is likely to fall much farther behind now that sanctions on Western equipment and investments are in place.

          • Somehow I doubt that will continue or be nearly as irrecoverable as the Peter Zeihans of the world naively predict. Decoupling is hurting in the short term, but it will also likely force China and Russia to fix their education and professional systems, as we've now made doing so essential for their national security.

  • Maybe PROC won't invade ROC while there's still chip deliveries in the pipeline.

    • Re: (Score:3)

      by kyoko21 ( 198413 )

      Or, if they can't have it, no body will.

      • Re: (Score:3)

        by AmiMoJo ( 196126 )

        Given how much money they are throwing at developing high end fab technology, if Europe and the US don't move quickly it could end up as only China having any significant manufacturing capability.

  • Actually, I, for one, think we should give it to them. If ChatGPT and Bard are anything to go by, it'll ruin their economy, delegating them to a tiny regional power before they realize their mistake.

    I mean, that's what's happening to us in the US. Mass firings, CxOs drinking the kool-aid, etc.

  • Money talks; nobody walks.

  • CEO's would sell out their own country if it would slightly improve their quarterly profits, Nvidia will just move to another country if this were to happen

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