Chinese artificial intelligence (AI) companies are scrambling to secure Nvidia's advanced graphics processing units (GPUs) as concerns grow that US semiconductor export controls could extend to remote cloud services. They are proactively obtaining GPU access from overseas data centers while also showing signs of stockpiling advanced chips in China's gray market.
On November 12, Reuters reported, citing multiple sources familiar with the matter, that major Chinese cloud service providers are internally discussing plans to secure long-term access to Nvidia GPU computing power from abroad. Some Chinese firms are reaching out to overseas data center operators to pre-book GPU usage, while smaller AI developers are reportedly contacting major computing rental companies in Southeast Asia.
This urgency reflects a sense of crisis among Chinese companies that new regulatory gaps may be closed in the US's semiconductor export controls. The US has restricted the direct export of Nvidia's cutting-edge AI semiconductors to China, citing national security and the need to maintain technological superiority. Consequently, Chinese firms have been indirectly utilizing advanced semiconductors by renting Nvidia GPU computing power installed in overseas data centers.
Particularly concerning for Chinese companies is the Remote Access Security Act (RASA), which is currently being pushed through Congress. This legislation would grant the US Department of Commerce the authority to regulate remote and cloud-based access to technologies subject to export controls. The bill passed the House in January and is awaiting Senate consideration. If enacted, it could limit Chinese companies' ability to use advanced Nvidia GPUs through overseas data centers.
The potential for increased US enforcement is also impacting China's informal distribution market. According to Reuters, semiconductor brokers and traders in China are stockpiling advanced Nvidia GPUs in anticipation of heightened crackdowns on smuggling. There is a belief that gray market transactions supplying advanced AI servers and GPUs to China could shrink as a result of US export controls.
Meanwhile, concerns over regulatory tightening have weighed on the stock prices of Chinese AI firms. On November 12, Alibaba's shares fell by as much as 7.1% during trading on the Hong Kong Stock Exchange, while AI model developer Zhifubai and Minimax also dropped by over 7%. The anxiety that securing advanced GPUs, essential for the growth of China's AI industry, could be influenced by changes in US policy has dampened investor sentiment.
* This article has been translated by AI.
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