As the US considers limits on cloud computing, how will China's AI industry respond?

As the US considers limits on cloud computing, how will China's AI industry respond?
Summary
Chinese AI developers face restrictions on purchasing powerful AI chips legally.
Domestic firms use cloud to train models by leasing foreign server space.
Proxy entities in other countries help bypass US legal barriers for chip access.

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Chinese developers in the field of artificial intelligence are encountering a significant obstacle when it comes to training their next-generation frontier models: the inability to legally access the world's leading AI chips. Despite this challenge, both major technology companies and startups in China have found ways to remain competitive with their international counterparts.

The key to their success lies in an innovative workaround that involves leveraging cloud computing to shift substantial training workloads beyond their borders. This approach has enabled them to establish proxy entities in various foreign locations, allowing them to rent server space in data centers located throughout Southeast Asia, Japan, and the Middle East.

A broker from Shenzhen, who preferred to remain anonymous due to the sensitive nature of the situation, explained that under agreements signed with non-Chinese firms, models are being developed using state-of-the-art Nvidia processors situated thousands of miles away, effectively escaping the jurisdiction of US authorities.

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