Chinese GPU Companies See AI Opportunities, Despite Nvidia: Report

With U.S. Restrictions on high-end artificial intelligence (AI) and high-performance computing (HPC) exports to China, Chinese GPU developers see a golden opportunity to fill the void in their domestic market. For now, the market of AI hardware is dominated by Nvidia, but as Chinese GPU vendors polish their hardware and software, they may carve out more than a niche, reports DigiTimes.

Chinese firms such as ILuvatar CoreX, Moore Threads, and BirenTech are actively collaborating with local cloud computing providers like Bidu to run their LLM services. Other companies like DenglinAI, Vast AI Tech, and MetaX have developed products that run large language models from the start. For companies like Moore Threads, this move indicates a shift in focus from gaming hardware to a more profitable data center business. 

Interestingly, some Chinese enterprises are exploring alternative routes to compete in the AI-accelerated computing sector. For instance, Alibaba subsidiary T-Head, and Enflame, are investigating in non-GPU solutions as a way to gain a foothold in the market. This diversification strategy could offer them a unique selling proposition and make them more competitive. Meanwhile, since Alibaba develops chips for its own data centers, they are poised to be a success if they deliver the right performance at the right power.

The current situation is a mixed bag for these Chinese companies. While Nvidia's market dominance serves as an educational platform that raises awareness about the importance of compute GPUs for AI and HPC, it also leaves little room for other players, especially in the global arena. However, the firms are optimistic, as they believe Nvidia's success is essentially laying the groundwork for them as the market shifts from CPUs to compute GPUs.

In fact, the most recent quarter results of Intel and Nvidia prove that, for now at least, GPUs can better address the emerging AI sector. Nvidia's revenue totaled $13.5 billion in Q2 FY2024, whereas Intel's revenue totaled $12.9 billion. Those numbers might seen pretty close, but Nvidia's data center revenue reached $10 billion, which is more than double that of Intel's data center revenue of $4 billion.