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China\u2019s chip industry may have found a way to make an advanced chip that can power a 5G smartphone<\/a>, but it can\u2019t yet make a chip powerful to run AI applications. And that dependence on chip imports, restricted by a U.S. ban, could now be putting China\u2019s tech sector at a disadvantage in the race to dominate AI. <\/p>\n Chinese tech firms are rationing the use of their AI services because a lack of computing power, caused from a shortage of chips, reports The Information<\/a>. <\/em><\/p>\n One firm, the live-streaming platform Kuaishou, had to limit the number of people who could use the test version of Kling, its text-to-video model, to avoid running short of computing capacity. The company used Nvidia chips, like the A800, to train its model.<\/p>\n AI startup Moonshot AI, most recently valued<\/a> at $3 billion, is also warning users of its popular chatbot that computing power may be insufficient during peak hours.<\/p>\n Alibaba, Baidu, and ByteDance\u2014all of which offer large language model applications\u2014are telling corporate customers that need heavy usage to wait in line, according to The Information. <\/em><\/p>\n Kuaishou, Moonshot AI, Alibaba and Baidu did not immediately respond to a request for comment. A ByteDance spokesperson said the company wouldn\u2019t comment on \u201cmarket rumors.\u201d<\/p>\n Chinese companies are rushing to create<\/a> their own generative AI applications to get ahead in the country\u2019s fiercely-competitive consumer internet sector. Yet companies running these applications will need access to processors that can power them. <\/p>\n The U.S. places strict export controls<\/a> on the sale of AI-related chips, like those made by Nvidia, to China.<\/p>\n Chinese companies have previously warned that the export ban was affecting their business. Alibaba blamed U.S. export controls when it abandoned its plan<\/a> to spin off its cloud computing unit last November. At the time, the e-commerce company said the restrictions \u201cmay materially and adversely affect\u201d its ability to serve customers.<\/p>\n As non-Chinese firms scramble to get their hands<\/a> on new Nvidia chips, Chinese companies are instead running through their stockpiled inventory<\/a>, as Biden administration rules<\/a> effectively cut off China\u2019s access to high-end AI chips made by companies like Nvidia and Qualcomm.<\/p>\n While Nvidia and other chipmakers are working on new products that comply with U.S. rules, Chinese companies are reportedly not keen<\/a> on these watered-down chips. <\/p>\n Chinese firms like Huawei are now working on developing domestically-produced AI chips, but it\u2019s still uncertain whether the industry can make high-end semiconductors at scale. U.S. export controls also bar the export of advanced chipmaking tools to China, and Washington is reportedly pressing<\/a> allies like the Netherlands and Japan to tighten controls further by halting maintenance services as well.<\/p>\n<\/div>\n\nU.S. chip controls have an effect<\/strong><\/h2>\n
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