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A reporter films at a data centre supported by Huawei, at Hongliulin Coal Mine during a Huawei-organised media tour, in Shenmu of Yulin city, Shaanxi province, China April 25, 2023.

REUTERS/Tingshu Wang

When banned US chips are cheaper in China

Not only are Nvidia’s high-end chips getting through to the Chinese market, despite stringent export controls levied by the Biden administration, but they’re actually cheaper to access in China than in the US.

According to a new Financial Times report, Chinese data centers offering Nvidia’s AI chips charge just $6 an hour to use a server with eight Nvidia A100 processors. That same setup in the US costs about $10 an hour.

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FILE PHOTO: A smartphone with a displayed NVIDIA logo is placed on a computer motherboard in this illustration taken March 6, 2023.

REUTERS/Dado Ruvic/Illustration/File Photo

Nvidia’s high-flying earnings aren’t good enough

Nvidia’s earnings reports have become a cultural phenomenon, with super-fan investors even throwing watch parties to tune into how high-flying the chip maker’s marks will be each quarter.

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A computer chip with the letters AI on top of it.

Photo by Igor Omilaev on Unsplash

How China smuggles sought-after chips

The US has placed strict limits on the sale of powerful chips to China. But in the underground electronics market in Shenzhen, the southeastern port city, vendors reportedly claim to be moving hundreds or even thousands of banned chips. These include Nvidia’s A100 and H100 series chips, their most advanced models.

One vendor said he arranged a $103 million shipment to a nearby warehouse. “The Shenzhen market cannot be restricted,” he told the Times. That these middlemen are getting their hands on powerful chips is a serious threat to US economic and national security priorities, as the Biden administration is dead set on limiting Chinese access to any technologies that can fuel the government’s AI ambitions. Commerce Secretary Gina Raimondo said recently that she’s under “no illusions” that her department is executing their goals perfectly and told the Times she’s limited by budget constraints.

A Chinese military with artificial intelligence at its fingertips is a nightmare scenario for the US, and while its export controls have limited what China can make, it might never be able to fully plug leaks in the mechanism.

A photo illustration of a smartphone displaying the NVIDIA Corporation stock price on the NASDAQ market, with an NVIDIA chip visible in the background.

Jonathan Raa/NurPhoto via Reuters

A chip bottleneck

Margrethe Vestager, the European Union’s competition chief, has warned of a “huge bottleneck” involving Nvidia. The US semiconductor company plays a pivotal role in designing chips necessary for training and running artificial intelligence models and applications — good for 80% of the market. In recent months, Nvidia has become a $3.1 trillion company — now the third-most-valuable firm in the world behind only Microsoft and Apple.

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SOPA Images via Reuters

Apple wants its own chips

Apple is leveling up its chip ambitions. The Silicon Valley technology giant has spent years designing chips for its own hardware — for Macs, iPhones, iPads, and more. But, running AI models requires higher-grade chips like NVIDIA's graphics processors, which have become industry standard.

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A student of National University of Malaysia walks past displays of the country's "Stripes of Glory" flags at its campus in Bangi outside Kuala Lumpur August 22, 2007.

Bazuki Muhammad via Reuters

Hard Numbers: Microsoft takes Malaysia, Massive (and unknown) startup, Safety first, Don’t automate my news

2.2 billion: Microsoft has its eye on Southeast Asia. The computing giant announced it’ll pour $2.2 billion into Malaysia’s cloud infrastructure over the next four years and will establish a national AI center with the government. This investment is the latest in a string of Microsoft infusions in local economies to help develop AI: In the past month, the company announced a $2.9 billion investment in Japan, $1.7 billion in Indonesia, and a new data center in Thailand, plus a $1.5 billion stake in the UAE firm G42.

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US Secretary of Commerce Gina Raimondo announces a major grant at the Samsung semiconductor plant in Taylor, Texas, on Monday, April 15, 2024.

Jay Janner / American-Statesman / USA TODAY NETWORK via Reuters

Samsung hands Biden another chip win

The Biden administration is busy courting global semiconductor manufacturers to build stateside, recently handing billions to Taiwan Semiconductor Manufacturing Company to expand its chip fabrication plant in Phoenix, Arizona.

On Monday, Commerce Secretary Gina Raimondo announced that the Biden administration is giving out another award as part of its CHIPS Act budget — this time to TSMC competitor Samsung, the South Korean electronics giant. Samsung will receive $6.4 billion to put toward its new manufacturing hub in Taylor, Texas, and expand its existing plant in Austin. In return, Samsung will pour $45 billion into its US projects and commit to producing cutting-edge two-nanometer chips.

Biden has made so-called silicon nationalism a tenet of his economic and national security-focused public policy, desperate to control the slow but crucial supply of chips used for everyday technologies as well as new artificial intelligence applications.

Google's Gemini home page displayed on a smartphone in a photo illustration.

Jonathan Raa/Sipa USA via Reuters

Hard Numbers: Pay for Google?, Indonesian investment, Amazon walks out on AI, Scraping YouTube

175 billion: Google said it made $175 billion in revenue from its search engine and related advertising last year, but is it ready to risk the golden goose? The company is reportedly considering charging for premium features on its search engine, including AI-assisted search (its traditional search engine would remain free). We’ve previously tested Perplexity, one of the companies trying to uproot Google’s search dominance with artificial intelligence, and you can read our review here.

200 million: The chipmaker Nvidia is teaming up with Indonesian telecom company Indosat to build a $200 million data center for artificial intelligence in the city of Surakarta, according to Indonesia’s communications minister. This news comes weeks after AI played a central role in the country’s presidential election, and it represents a major investment from one of the world’s richest tech companies in a key emerging market as Indonesia seeks to modernize its economy.

1,000: Amazon’s Just Walk Out in-store AI system for cashier-less grocery store checkout relied heavily on more than 1,000 contractors in India manually checking that the checkout transactions were accurate. Now, Amazon has announced it’s ditching the technology, which was being used in 60 Amazon-branded grocery stores and two Whole Foods stores.

1 million: One OpenAI team reportedly transcribed more than 1 million hours of YouTube videos to train its GPT-4 large language model. The company built a speech recognition tool called Whisper to handle the massive load, a move that may have violated YouTube's terms of use. YouTube parent company Google is a major rival to OpenAI in developing generative AI. Google hasn’t filed suit yet, but legal action could eventually come.

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