Tencent’s Strategic Move: Stockpiling NVIDIA AI GPUs for Future Generations

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    Tencent Stockpiles NVIDIA GPUs in the Wake of US Sanctions, Plans to Switch to Domestic Solutions

    Chinese tech giant Tencent has revealed its strategy to stockpile a vast amount of NVIDIA GPUs to sustain its AI training capabilities for several generations.

    However, the company has also expressed its intention to transition to domestic solutions in the foreseeable future due to US sanctions targeting access to higher-end NVIDIA AI GPUs.

    In a recent earnings report, Tencent disclosed that it has secured enough NVIDIA equipment to train its custom “Hunyuan” model, anticipating it to last for an extended period. Despite the US restrictions on NVIDIA’s high-performance AI GPUs, Tencent reassured stakeholders that its ongoing AI initiatives will not be immediately disrupted.

    We will have to figure out ways to make the usage of our AI chips more efficient. And we will also try to look for domestic sources for these training chips

    stated Tencent’s President Martin Lau

    The company’s reliance on NVIDIA GPUs for AI development, particularly in cloud computing, has been substantial, with NVIDIA’s market dominance in China exceeding 90%. The recent US ban is expected to significantly impede the growth of local industries by slowing down the adoption of advanced cloud services.

    While there have been speculations about NVIDIA introducing more Hopper GPUs targeting affected markets, Chinese firms like Tencent are actively exploring in-house solutions as alternatives. Tencent, along with other prominent Chinese tech companies, is considering utilizing Huawei’s Ascend AI chips as a viable option to counter the US influence on the market, with the flagship model demonstrating competitive performance compared to NVIDIA’s A100 accelerator.

    We’ll try to see whether we can offload a lot of the inference capability to lower-performance chips so that we can retain the majority of our high-performance AI chips for training purposes,” Tencent’s approach to diversifying its product portfolio reflects the company’s intention to utilize homegrown equipment for less critical tasks.

    The move towards domestic solutions not only marks a significant shift for Tencent but also underscores Chinese tech firms’ growing autonomy in AI development, potentially squeezing out AMD and NVIDIA from the regional AI markets if the US sanctions continue to escalate under the Biden government.

    The tech industry will be closely monitoring Tencent’s strategic transition as the company navigates the evolving landscape of AI chip procurement and development.

    Source: Reuters

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