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Chinese Tech Giant Tencent Looks for Domestic Sources for AI Chips

Summary

Chinese technology conglomerate Tencent Holdings has announced that it will be forced to seek domestic sources for training chips for artificial intelligence (AI) following new measures imposed by the United States (US) to restrict chip supplies to China. The White […]

Chinese Tech Giant Tencent Looks for Domestic Sources for AI Chips

Chinese technology conglomerate Tencent Holdings has announced that it will be forced to seek domestic sources for training chips for artificial intelligence (AI) following new measures imposed by the United States (US) to restrict chip supplies to China. The White House’s decision to ban the export of multiple AI chips to China last month will prompt Tencent to make more efficient use of existing chips and explore the production of domestic AI chips.

These comments from Tencent President Martin Lau come at a time when Chinese companies with ambitions in the field of artificial intelligence are grappling with increasing export restrictions on AI chips from the US to China. Chinese tech companies are increasingly turning to domestic chip manufacturers, such as Huawei Technologies, to supply AI chips instead of relying on American company Nvidia.

Tencent has announced that it has already reserved enough Nvidia chips to continue the development of its AI model, called Hunyuan, “for at least several more generations”. As a result, these new chip bans will not impact Tencent’s ability to develop AI capabilities in the near future. However, Lau stated that the new measures will affect Tencent’s cloud services, where the company sells computing power to clients. He added that Tencent currently holds one of the largest inventories of AI chips in China and will focus on more efficient utilization of existing chip stocks to maintain a high level of performance for training AI models.

With increasing export restrictions on AI chips from the US to China, Chinese companies like Tencent are gaining greater independence and the ability to control their supply networks thanks to domestic chip manufacturers. This move also highlights the challenges faced by multinational technology companies due to escalating trade disputes between the US and China, which could result in a shift in the dynamics of the global market for AI chips.

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