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    Home » China’s big tech boosts AI spending amid US limits
    Tech-0826
    Tech-0826
    AI

    China’s big tech boosts AI spending amid US limits

    By Lily YangAugust 26, 2024No Comments3 Mins Read
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    • Alibaba and ByteDance are significantly increasing investments in AI infrastructure, with Alibaba’s capex rising 123% to RMB 23 billion and ByteDance purchasing large quantities of lower-power Nvidia chips.
    • Despite US export restrictions, Chinese tech companies are adapting by investing in domestic startups and acquiring alternative processors to continue their AI advancements.

    OUR TAKE
    The substantial increase in AI investments by Chinese tech giants underscores a strong commitment to advancing technological capabilities despite external pressures. While the focus on lower-performance processors may limit some innovations, the ongoing investments signal resilience and a strategic pivot toward fostering local talent and resources. This trend could further enhance China’s position in the global AI landscape.
    –Lily,Yang, BTW reporter

    What happened 

    Despite U.S. export restrictions, Chinese tech giants are dramatically increasing their investments in AI. Alibaba’s capital expenditures surged 123% to RMB 23 billion yuan in the first half of the year, with its AI servers running at full capacity. The company is buying processors to power its unified AI model and provide cloud services.

    ByteDance, meanwhile, is buying Nvidia’s lower-performance H20 chips in bulk for its data centers in China, positioning itself as a major buyer of AI. Tencent also reported a 176% increase in capital expenditures, partly “driven by investments in GPU and CPU servers.” Both Tencent and Baidu have held back on spending amid regulatory concerns that have limited the scale of their investments.

    By comparison, Chinese tech companies’ overall spending on AI still lags behind their U.S. counterparts, which invested $106 billion in the same period and are expected to ramp up spending in the coming months.

    Also read: Alibaba Cloud powers Atlas’s global rise in low-cost travel

    Also read: ByteDance joins AI video race, rivals OpenAI

    Why it’s important  

    China has made a significant shift in its approach to AI development amid external pressure from the United States. Significant investments by Alibaba, ByteDance, and Tencent indicate their commitment to upgrading AI infrastructure and technological capabilities.

    ByteDance is relatively free from investor scrutiny as it is privately held. While Chinese companies are making progress in AI, tight market regulatory restrictions could hamper rapid development. Most Chinese companies are subject to export controls and rely on lower-performance chips. The difference in capital expenditures compared to U.S. companies highlights the challenges Chinese companies face in global competition.

    This news reflects both the relentless efforts of Chinese companies in the face of market regulatory restrictions and the ongoing competitive dynamics in the global tech landscape.companies in the face of market regulatory restrictions and the ongoing competitive dynamics in the global tech landscape.

    AI Alibaba ByteDance
    Lily Yang

    Lily Yang is an intern reporter at BTW media covering artificial intelligence. She graduated from Hong Kong Baptist University. Send tips to l.yang@btw.media.

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