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Intel Experiences Surging Demand for AI Chips in China as Companies Seek ChatGPT-Like Technology

Intel, the US tech giant, has experienced a surge in demand for its artificial intelligence (AI) chips designed for Chinese clients as companies in China rush to enhance their capabilities in AI technology similar to ChatGPT, according to a report from Taiwanese media outlet DigiTimes.

Intel Experiences Surging Demand for AI Chips in China as Companies Seek ChatGPT-Like Technology

Sales of Intel's Gaudi2 processors, tailored to comply with US export restrictions while meeting the Chinese market's demand for AI chips, have been robust since their launch in July. This has led Intel to increase orders from its supplier, Taiwan Semiconductor Manufacturing Co (TSMC).

Intel's Chief Financial Officer, David Zinsner, mentioned during a recent conference that more customers are turning to Gaudi chips as an alternative to processors facing supply shortages.

Chinese tech companies are engaged in a competition to develop their own large language models (LLMs), driving substantial demand for advanced chips used to train algorithms supporting intelligent chatbots akin to Microsoft-backed OpenAI's ChatGPT.

In August, China approved the public rollout of its first batch of local LLMs, including offerings from companies like Baidu, SenseTime, Zhipu AI, and Baichuan. This move allowed Chinese firms to open their chatbots to the world's largest internet population, paving the way for competition in the growing generative AI market.

As of May, China had at least 79 LLMs with more than 1 billion parameters, indicating their size and sophistication. However, the US has restricted China's access to advanced chips like Nvidia's A100 and H100 processors, commonly used for training LLMs.

The shortage of AI chips in China has led to a black market for smuggled chips in the country, which accounted for a significant portion of global semiconductor sales in the previous year.

Intel, which generated 27 percent of its total revenue in China last year, introduced Gaudi2 following the launch of Nvidia's remodelled A800 and H800 chips, which are also not subject to US export controls.

At the launch of Gaudi2 in China, Intel's Executive Vice President, Sandra Rivera, emphasized that the chip was designed to lower barriers to entry and enhance Chinese clients' ability to deploy AI through cloud and smart-edge technologies, contributing to the development of China's AI future.



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