All the moves of the Chinese iFlytek, SenseTime and more to grab the US chips. Report Ft
Some Chinese AI companies are leveraging cloud services to circumvent US restrictions on chip trading. The Financial Times article
Chinese AI groups are circumventingexport controls to access high-end US chips through intermediaries, revealing potential loopholes in Washington's blockade of cutting-edge technologies destined for the country. Writes the Financial Times .
AI surveillance groups hit by US sanctions have found ways to obtain classified technologies using cloud providers and lease agreements with third parties, as well as purchasing the chips through subsidiaries in China.
WHAT iFLITEK, SENSETIME AND AI-GALAXY DO
iFlytek, a state-backed speech recognition company blacklisted in Washington in 2019, has leased access to Nvidia's A100 chips, critical in the race to develop apps and services, according to two collaborators with direct knowledge of the matter. of cutting-edge AI.
Facial recognition group SenseTime, which was sanctioned at the same time as iFlytek, used intermediaries to buy the banned components from the United States, three senior employees familiar with the situation said.
Privately owned cloud computing companies also provide access to high-end US chips. AI-Galaxy, a Shanghai-based cloud computing company founded by former Nvidia and AliCloud employees, charges $10 for an hour of access to eight of its Nvidia A100 chips.
The ability of Chinese AI groups to continue accessing Nvidia's crucial high-end chips and other cutting-edge technologies underscores the challenge the United States faces in enforcing its trade restrictions on Chinese companies.
THE AMERICAN RESTRICTIONS ON CHIPS
Last October, Washington imposed unilateral export controls that prevented US companies from selling advanced chip-making and high-end semiconductor equipment, including the A100, to Chinese groups, widening trade restrictions on specific firms. blacklisted.
“iFlytek can't buy the Nvidia chips, but that's okay because it can lease them and train our datasets on other companies' computer clusters,” said an executive familiar with the AI firm's operations.
“It's like a car rental system. Chips cannot be taken outside the facility. It's a huge building with a cluster of computers and you buy time on CPUs [central processing units] or GPUs to train models,” the person said.
While iFlytek can't own the chips outright due to US export controls, two employees said the rental system is a good, if more expensive, alternative. An iFlytek engineer said the company "leases chips and equipment on a long-term basis, which is equivalent to owning them."
iFlytek was barred from directly purchasing these semiconductors after Washington blacklisted it for its alleged role in providing technology for state surveillance of Xinjiang Uyghur Muslims.
In some cases, SenseTime has purchased advanced chips directly through its subsidiaries that aren't on Washington's "entity list," according to three senior employees familiar with the situation.
SenseTime said it "strictly complies with various domestic and foreign trade laws and regulations" and that the group has developed a program to ensure "compliance with trade compliance standards".
iFlytek did not respond to a request for comment.
CLOUD SUPPLIERS ARE DISCOVERED
A US Department of Commerce spokesman said the Bureau of Industry and Security "vigorously investigates potential export control violations, but does not comment on specific allegations."
A Washington export control expert said US export regulations do not cover cloud providers, even if restricted chips are used. They added that the violation exists only if the technology is exploited to build weapons of mass destruction.
Chinese local governments were quick to help the industry stock up on high-end chips before Washington unveiled tough export controls last October.
A person close to iFlytek said US export restrictions have fostered the proliferation of state-backed computer clusters, which stockpiled Nvidia chips and leased access to the technology to blacklisted companies.
Additionally, a Zhejiang government official noted that “several places [local governments and companies] have built or are building AI computing centers, which provide cloud rental services for businesses. This is part of the new infrastructure supported by national policy”.
THE IMPACT ON THE CHINESE AI INDUSTRY
“All AI companies use and stockpile advanced chips like the Nvidia A100, including us,” said a SenseTime engineer, adding, “We do our compliance and legal work very thoroughly and carefully.”
“China's AI industry is at huge risk due to US sanctions,” a person close to SenseTime said. “We expect the US to impose further sanctions on Chinese AI companies, their suppliers and their customers. We need to make sure our supply chain and sales remain stable,” the person added.
Private cloud providers have seen a surge in demand for Nvidia's A100 chips, the same ones used in generative AI models like OpenAI's ChatGPT.
An executive at a US tech giant in China said the company continued to offer local businesses access to cloud computing on the A100 chip and that the offer has attracted a slew of startups looking to clone ChatGPT . The company's US legal team was initially wary about continuing to offer cloud computing services based on the A100 chip, but ultimately decided not to flout export controls.
While US export controls don't explicitly prohibit access to chips through cloud service providers, some companies are still taking steps to obscure their identities.
An executive at a cloud services start-up in Shenzhen said he has seen a surge in demand for A100 chips from "strange" companies masking their true identities behind shell companies.
“Our counterparts have told us we should never worry about finding out who is behind it,” the executive said.
Nvidia stated that “while we cannot control every future use or downstream sale of our products, we require our distributors to follow all U.S. export rules and only sell to commercial, consumer and academic customers who use our products. for charitable purposes".
(Excerpt from the press release of eprcommunication)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/chip-iflytek-sensetime/ on Sun, 19 Mar 2023 06:15:09 +0000.