China Offers Start-Ups AI Computing Vouchers

China’s government is offering vouchers to domestic start-ups to pay for AI computing power, amidst constrained supply due to increasing US export controls on resources such as high-end Nvidia GPUs, the Financial Times reported.

At least 17 city governments, including Shanghai, the largest, have pledged to offering “computing vouchers” to subsidise start-ups’ rising AI data centre costs, the paper said.

The vouchers are typically worth $140,000 to $280,000 (£110,000 to £220,000) and can be used to buy computing time to train and run AI models, according to official announcements.

The move comes after companies that offer cloud computing services cancelled contracts with third parties in order to “hog the GPUs for themselves”, the paper cited an unnamed AI founder as saying.

Chip scarcity

Alibaba, Tencent, ByteDance and others have limited rental of Nvidia GPU-powered cloud computing time and have reserved the majority of stockpiled AI processors for internal use and important clients, the FT cited sources as saying.

Alibaba Cloud has distributed the majority of its advanced GPUs to business units within the Alibaba Group, two employees told the paper, while a manager said acquiring high-performance chips has become an “arduous task”.

While the vouchers may aid start-ups with costs, the problem of scarcity remains, something that was a major topic of proposals from tech executives at the “two sessions” political gathering this week.

Cao Peng, chair of the technology committee at e-commerce giant JD.com and head of the firm’s cloud unit, said in his proposals that China needs more home-made advanced AI chips, according to documents published on JD.com’s official WeChat account.

Data centre capacity

“Computing power is the foundation for training large [language] models,” Cao wrote, adding that sourcing domestic facilities for computing power was a pressing national issue.

In a recent interview with Wired, Nvidia chief executive Jensen Huang identified Huawei for the first time as a significant AI chip competitor, calling Huawei a “really, really good company”.

Huawei, which talked up AI as a “key strategy” ahead of last month’s Mobile World Congress in Barcelona, makes the Ascend 910B AI chip, which analysts have called a significant rival to Nvidia’s high-end A100 chip that is banned for export to China.

“It [the Ascend 910B] is a bit above the A100 theoretically,” SemiAnalysis chief analyst Dylan Patel told the South China Morning Post.

AI chip bottleneck

The SMIC-manufactured 910B is “available for order, but supply is really tight at the moment”, a GPU distributor told the paper.

Reuters reported last month that Huawei and SMIC were prioritising AI chip production as the companies faced a bottleneck with the success of both the Ascend chips and Huawei’s Kirin 5G smartphone chips.