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Tech war: why the US Nvidia chip ban is a direct threat to Beijing’s artificial intelligence ambitions

  • US export restrictions on Nvidia data centre GPUs could hit China’s most powerful artificial intelligence systems, which rely on such chips
  • Industry insiders expect companies to stockpile Nvidia chips before the ban takes effect next year, while carmaker Xpeng says it has years of reserves

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US restrictions on Nvidia graphics processing unit sales to China could hamper the artificial intelligence development, but some see an opportunity to boost efforts in local GPU development. Illustration: Lau Ka-kuen
Che Pan
ByteDance’s enterprise cloud service, Volcengine, has cut the training period for an image-recognition, artificial intelligence (AI) model from 5 days to 3 days; Alibaba Cloud’s Sinian computing platform has beat a Google-held record by recognising 1.078 million images per second in offline scenarios; and China’s largest server maker Inspur’s NF5488A5 model has been hailed as a world-class product in medical image segmentation, speech recognition and natural language processing.

But none of these achievements by China’s most powerful technology players would be possible without the powerful graphic processing units provided by Nvidia Corp, the Santa Clara-based GPU giant that has played a pivotal role in powering China’s progress in AI, data analysis and computing power.

The US government’s sudden decision last month to restrict Nvidia from selling its two most advanced chips, the A100 and the upcoming H100, to clients in China has therefore sent jitters across China’s AI, cloud computing and smart vehicle sectors, as there is no immediate substitute for the Nvidia GPUs that train AI models for autonomous driving, semantic analysis, image recognition, weather variables and big data analysis, according to industry insiders and tech analysts.

Nvidia headquarters in Santa Clara, California, seen on May 25, 2022. Photo: AFP
Nvidia headquarters in Santa Clara, California, seen on May 25, 2022. Photo: AFP

The full extent to which Washington’s latest ban on chip technology will hit China’s downstream industries is still hard to evaluate. Nvidia has said it is trying to mitigate the impact on Chinese clients, such as replacing the advanced GPUs with products that are not subject to US licensing requirements.

Elsewhere, a number of Chinese GPU firms have expressed hopes that the ban may give them a chance to win over former Nvidia clients now that the US-made chips are off limits.

But it is not hard to detect the psychological impact from this targeted US measure on Chinese policymakers and investors.

President Xi Jinping stressed at a key meeting this month that China must step up development of technology critical to national security and adopt a top-down “new whole country system” to seek breakthroughs. The summary of Xi’s remarks did not mention semiconductors or the latest GPU restrictions by the US.

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