No chips, no problem: China's innovative strategy to boost AI development

2 mins

AI FOR Other purposes

07 March 2024, 04:51PM

In BriefChina offers computing vouchers to AI startups to counter U.S. chip restrictions.
17 city governments, including Shanghai, pledge to provide "computing vouchers" valued at $140,000 to $280,000 to assist AI companies.
Stricter U.S. controls lead internet firms to retain AI processors, affecting cloud computing contracts and highlighting resource scarcity.
Analysts believe vouchers may ease cost barriers but won't fully resolve resource shortages, prompting Beijing to plan subsidies for AI firms using domestic chips.
China is developing an alternative to Big Tech's data centers and cloud services with state-run data centers and online platforms to boost its AI industry.

China is taking decisive steps to support its artificial intelligence (AI) startups in the face of U.S. chip restrictions. The country's latest move involves offering "computing vouchers" to these companies to tackle challenges arising from the chip shortage.
A Proactive ApproachThe Chinese government's proactive stance aims to assist AI startups grappling with the scarcity of vital chips due to U.S. regulations. Reports indicate that at least 17 city governments, including Shanghai, have pledged to provide "computing vouchers" valued between $140,000 and $280,000 to help these businesses cope with escalating data center expenses.
Responding to Industry ChallengesInternet companies are facing dilemmas as stricter U.S. controls prompt cancellations of cloud computing contracts. Consequently, these firms are retaining the bulk of AI processors for in-house use and significant clients.
Addressing Resource ShortageIndustry analysts suggest that while the vouchers may alleviate cost barriers, they are unlikely to fully resolve the resource scarcity issue. To further bolster the AI sector, Beijing plans to introduce a subsidy program for AI entities utilizing domestic chips.
Building Domestic InfrastructureChina is also establishing an alternative to Big Tech's data centers and cloud services by setting up a network of state-operated data centers and online platforms over the past year.
Significance of the InitiativeThis bold move by China to support its AI startups holds substantial importance. With potential restrictions looming on semiconductor exports from the U.S. and the Netherlands, the chip shortage problem could worsen, making it imperative for China to fortify its domestic AI industry.
Despite the challenges, Chinese AI startups are making remarkable progress. Notably, 01.AI, a lesser-known AI startup, secured $200 million in funding from Alibaba and other investors, propelling it to the top of the AI rankings and underscoring the global potential of Chinese AI startups.