China is reportedly providing energy incentives to domestic CSPs to keep them attracted to the 'power hungry' AI chips from Huawei and Cambricon.
China is Making Up For Power Hungry Domestic AI Chips By Offering Massive Electricity Incentives
Well, after voting "100% no" to NVIDIA's AI chips, it seems like the Chinese AI industry is currently reliant on domestic solutions being offered, which are claimed to be 'terrible' when it comes to performance-per-watt figures. Based on a report by the Financial Times, Chinese chips are "30% to 50%" less power efficient compared to the H20 AI chip from NVIDIA, which means that electricity bills have gone through the roof. However, the administration has stepped up to mitigate the problem by providing substantial incentives to data centers that run local AI chips.
Local governments in data centre-heavy provinces such as Gansu, Guizhou and Inner Mongolia have responded by offering subsidies that slash big data centres’ electricity bills by as much as 50 per cent, provided that they are powered by domestic chips.
Data centres using chips from foreign vendors such as Nvidia are not qualified for such entitlements, the people said.
One way companies like Huawei pledge to offer performance rivaling NVIDIA's top-end AI solutions is by increasing power consumption numbers or combining 'thousands' of AI chips into a single cluster, which has energy ratings significantly higher than those of systems like Blackwell. However, China's robust grid system appears to be sufficient to run its domestic tech stack, and driven by the incentives local administrations are offering, it seems that the inclination towards Huawei and other Chinese chip manufacturers will increase.
It seems that China, as a nation, will not allow the influence of American technology to enter the industry anytime soon, and with that, the domestic industry will be deprived of high-end computing capabilities. It would take the local AI industry years to compete with rivaling offerings from NVIDIA. Apart from just getting the architecture in place, China still needs to establish sufficient production lines, which include semiconductors, HBM, and advanced packaging.
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