China's AI industry has seen massive developments recently, as the government starts to make efforts to ensure reliance on domestic AI chips.
China Is Encouraging The Use of Domestic AI Chips, But It Seems Like There's No Alternative to NVIDIA For Now
The recent trade situation, particularly between the US and China, has prompted both nations to tighten their grip on their respective AI technologies due to their importance. We recently saw how Beijing is moving against NVIDIA's H20 AI chip by reportedly advising local tech giants not to buy foreign chips as they could contain security flaws. And now, China is pushing domestic AI chip efforts, as the nation is now imposing requirements on data center buildouts to use homegrown solutions, heavily benefiting the likes of Huawei and Cambricon.
It is claimed that the government is demanding that data centers be equipped with more than fifty percent of AI chips coming from domestic AI companies. The nation wants to reduce its reliance on NVIDIA, and considering that the US government has plans to impose security backdoors into chips flowing into China, the switch towards chips like Huawei's Ascend might be much more widespread. It is revealed that domestic AI chips cannot deliver the performance required to train top-tier AI models, which is why it is rumored that DeepSeek's next R2 model is delayed.
With the growing demand for Chinese AI chips, firms like Cambricon are capitalizing on the hype by raising capital to fund their optimistic projects. Cambricon is expected to raise around 4 billion yuan, as the firm pushes its AI chips to replace the likes of AMD and NVIDIA. The Chinese AI firm offers options like the Siyuan Series for data centers and cloud computing, and is currently developing advanced options for LLMs to allow domestic AI firms to train next-gen AI models. But for now, the company has yet to make a solid breakthrough.
There are a few options available to Chinese AI customers, mainly coming from Huawei. The firm offers its Ascend AI chip lineup, which includes models like the Ascend 910B and 910C, with the latter one rumored to beat NVIDIA's H100 chip in training performance. Similarly, Huawei also has a rack-scale solution called the CloudMatrix 384, which is said to rival NVIDIA's Blackwell NVL72 system. However, switching to domestic AI solutions isn't easy for Chinese firms, especially when no software matches the likes of NVIDIA's CUDA for now.
China is looking for an alternative to NVIDIA's AI chips for now, but at least in the near term, the nation has to rely on American technology, given that domestic counterparts are
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