China’s desperate moves to get Nvidia chips
To develop AI systems by circumventing American restrictions, companies in China are having Nvidia gaming cards dismantled to reuse the microchips. A "desperate move", according to experts. All the details
Unable, due to US restrictions, to access the most advanced and high-performance microchips, Chinese companies have begun to dismantle electronic devices designed for gamers to access the components contained within them and exploit them in the development of systems for artificial intelligence.
WHY NVIDIA CARDS FOR VIDEO GAMES ARE DISASSEMBLED IN CHINA
As revealed by an investigation by the Financial Times , every month thousands of gaming graphics cards from NVIDIA, the dominant US company in this market but also specialized in semiconductors for artificial intelligence, are dismantled in Chinese factories; critical components are removed and installed on new circuits.
These are microchips designed to be inserted into computer motherboards and improve the graphics performance of video games, but they are still proving useful to China to compensate for the lack of advanced processors needed for artificial intelligence. However, despite being devices equipped with a certain computing power, they are not as performing as those developed specifically to carry out those high precision activities that are necessary for the "training" of large language models based on artificial intelligence, which manage enormous amount of data. As the Financial Times explains, it is difficult for Chinese companies to overcome limitations on the interconnection speed between these chips simply by grouping them in larger quantities in computing clusters.
“A DESPERATE MOVE”
This is – as 86Research analyst Charlie Chai said – “a desperate move by Chinese companies subject to export controls” introduced by the United States since last October, which prevent them from accessing advanced components developed or made with American technologies. “Just like using a kitchen knife to create a work of art,” continues Chai, “it can be done, but the result is not optimal.”
Joe Biden's administration has also restricted exports to China of those less sophisticated microchips (the A800 and H800 models) that NVIDIA had developed specifically for the Chinese market, "weakening" some of its advanced products already subject to commercial limitations.
WHO ARE THE CUSTOMERS OF DISASSEMBLED MICROCHIPS
According to the British newspaper's sources, in December there was an increase in demand in China for graphics processing units (GPUs, in jargon) from gaming cards. One factory, in particular, revealed it had dismantled over four thousand NVIDIA graphics cards last month, more than four times as many as in November.
Customers of these “repurposed” components are mainly public companies and small AI development centers that did not stockpile sufficient quantities of NVIDIA microchips before the latest American restrictions came into force. In recent months, the Financial Times had revealed how large Chinese technology companies (for example Baidu , Tencent and Alibaba) had placed large orders of Nvidia's A800 chips until 2024, for a total value of 1 billion dollars, in order to secure supplies for the future.
NVIDIA STOPS SALES
However, the practice of disassembling and "reconditioning" NVIDIA products constitutes a violation of the company's intellectual property rights: for this reason, it is possible that the sale of some gaming graphics cards in China could be banned. Some of this is already happening: the GeForce RTX 4090, NVIDIA's most powerful gaming card (and in fact one of its most frequently dismantled models), is no longer sold in China. The company has already organized itself by offering a weakened version, 5 percent slower, for the Chinese market: the GeForce RTX 4090 D.
The 4090 D may not offer enough performance to power AI language models, but that's not yet clear.
NVIDIA'S NEW CHIPS (WEATHERED) FOR CHINA
NVIDIA has also developed three versions of artificial intelligence chips specifically for the Chinese market (which therefore comply with US technology export control rules): they have significantly lower performance than models previously sold in the country – but a similar price -, and they probably won't be available until next March.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/cina-smontaggio-schede-gaming-nvidia-microchip/ on Sun, 14 Jan 2024 06:37:28 +0000.