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Tencent rushed to construct up “one of many largest inventories of AI chips in China” earlier than US export restrictions took maintain, an government stated Wednesday.
Martin Lau, president of the Chinese language tech big, instructed analysts on an earnings name that it had bought elements from Nvidia (NVDA) early, permitting it to maintain creating its generative AI mannequin for a minimum of “a few generations.”
“One of many key issues that we’ve got finished was really we had been the primary to place in orders for [the] H800, and that permits us to have a fairly good stock,” Lau stated.
He added that Tencent was now scouting new suppliers inside China “for these coaching chips.”
Lau didn’t specify when the acquisition befell, however the H800 is among the many merchandise restricted from sale to China as a consequence of US export curbs introduced final month, Nvidia stated in October regulatory filings. It is without doubt one of the chipmaker’s superior AI chips designed to be used in information facilities, the bodily amenities used to retailer troves of digital data.
In late October, Nvidia disclosed that the just-announced restrictions had come into impact “instantly,” weeks sooner than scheduled.
Over the previous yr, america and China have progressively escalated a feud over entry to probably the most superior semiconductors, in addition to the supplies and tools wanted to create the know-how.
Washington’s determination to scale back the forms of semiconductors that American firms can promote to China final month additional tightened a set of export controls first launched in October 2022 on nationwide safety grounds.
The Biden administration deems the most recent measures crucial to stop potential use of the {hardware} for China’s navy development and to shut loopholes in present rules. In response, Beijing has accused Washington of “weaponizing commerce and tech points.”
The standoff has led different Chinese language companies to construct up their chip provides.
This month, certainly one of China’s most distinguished tech buyers, Kai-Fu Lee, instructed Bloomberg that his new Beijing-based startup, 01.AI, had additionally stockpiled chips it wanted for the close to future.
The corporate started assembling its reserve of chips earlier this yr, even utilizing borrowed funds from Lee’s enterprise agency Sinovation Ventures, as a result of “we felt we needed to,” he instructed the media outlet in an interview. The enterprise capital agency didn’t reply a request for touch upon the matter.
The observe of stockpiling is just not new. In recent times, earlier than it was slapped with crippling US commerce restrictions in 2020, Chinese language tech big Huawei additionally “stockpiled a two-year provide of chips previous to US entity restrictions taking impact,” based on a report from the Heart for Strategic and Worldwide Research.
China’s prime chipmaker, Semiconductor Manufacturing Worldwide Company (SMIC), has additionally “amassed numerous machines and probably additionally a big stockpile of spare components that it might probably draw from,” the report stated.
Whereas the US export ban presently doesn’t “have an effect on the event of Hunyuan and our AI functionality within the close to future,” Tencent is anxious it may have an effect on its potential to resell elements to different prospects, based on Lau, referring to its AI bot.
“Going ahead, we must work out methods to make … the utilization of our AI chips extra environment friendly,” particularly by working to retain many of the firm’s high-performance chips for coaching the mannequin, he added.
Hunyuan, which Tencent says is supposed to indicate “one thing that’s all encompassing and with out restrict,” was launched by the Shenzhen-based firm in September.
The bot was developed particularly for company customers, permitting them to compensate for conferences by viewing automated summaries or put collectively paperwork extra effectively, Lau instructed analysts.
The platform is presently accessible on a restricted foundation to prospects and the general public, based on Tencent.
The corporate has reported strong earnings for the quarter ended September, logging a ten% bounce in income that met analyst expectations. Gross sales surged to 154.6 billion yuan ($21.3 billion) in comparison with the identical interval a yr in the past, whereas revenue attributable to shareholders climbed 39% to 44.9 billion yuan ($6.2 billion).
