The U.S. government's pressure has led to the collapse of a $7 billion lease agreement for artificial intelligence (AI) semiconductors that Chinese internet giant Tencent was pursuing.
On November 5, the Financial Times reported that Oracle, the U.S. software company, has suspended negotiations with Tencent regarding the lease of approximately 100,000 high-performance AI semiconductors for five years through a data center established in Southeast Asia. Tencent had been negotiating with Oracle to utilize computing resources set up overseas, given the U.S. ban on the import of advanced AI semiconductors to China. According to the report, the U.S. government expressed concerns to Oracle about the transaction, prompting the halt in negotiations. The specific models and manufacturers of the GPUs intended for this contract were not disclosed.
Additionally, the Chinese government has reportedly pressured Tencent to increase its use of domestically produced semiconductors. The Financial Times noted that officials from Guangdong Province, where Tencent's headquarters is located, visited the company's executives to encourage the use of Chinese-made AI semiconductors. This move appears to be part of the Chinese government's efforts to bolster its domestic semiconductor industry.
Chinese tech giants like ByteDance and Alibaba have been utilizing computing resources established in overseas data centers to circumvent U.S. semiconductor export controls. If the U.S. also targets Alibaba and ByteDance, it could disrupt their infrastructure expansion strategies.
There is growing interest in the potential for alternatives to Chinese GPUs. In China, domestically produced AI semiconductors, including Huawei's Ascend series, are being developed as alternatives to NVIDIA products. However, experts suggest that fully replacing U.S.-made advanced GPUs in the short term will be challenging due to the scale of supply, software ecosystem, and performance required for large-scale AI model training.
* This article has been translated by AI.
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