Analysis-U.S. ban on Nvidia, AMD chips seen boosting Chinese rivals 
SAN FRANCISCO (Reuters) - The U.S. ban on exports to China of Nvidia and AMD’s flagship artificial intelligence chips will create new business opportunities for domestic startups jockeying for a piece of China’s fast-growing data center chip market, industry executives and analysts told Reuters.
The company says it has no plans to sell to the military.
Jack Dongarra, a distinguished professor of computer science who helps lead the Top500 ranking of the fastest supercomputers says he’s seen this scenario play out before. “The U.S. embargoed Intel chips from going to specific places in China that are and were developing high performance computers,” he said. “The result was that China designed its chips for its supercomputers.”
CCS Insight chip analyst Wayne Lam said Biren could be in for a “success story, having demonstrated this capability and now having this business opportunity fall on them”. He said Chinese computing groups will likely “have to re-tinker their systems and figure out how to build for something that they can get.”
Still, some analysts and U.S. chip executives say to gain AI market share companies need more than just a fast chip. They need to build a software ecosystem for the chips that can compete with Nvidia’s software platform called CUDA which dominates the AI market.
“New Chinese firms in the space will have to prove that they are reliable, can iterate hardware at the cutting edge... And then offer a compelling software ecosystem,” said Paul Triolo, senior vice president for China at strategy firm Albright Stonebridge Group.
Also active in developing Nvidia alternatives are Chinese firms like Cambricon, Alibaba Group’s PingTouGe, Iluvatar CoreX, Denglin Technology, Moore Threads, Vastai Technologies and MetaX.
Data firm PitchBook shows that those top startups alone have raised $2.5 billion in recent years, including from Shanghai government-backed fund Shanghai Guosheng Group and Hillhouse Capital, which counts several U.S. pension funds and Yale University as limited partners. Other investors include the Chinese entities of big-name Silicon Valley venture capital firms like Sequoia China and Lightspeed China Partners.
Those investments have caused concern for some who are pushing to limit where U.S. capital can be invested overseas, said Matt Ocko, managing partner of Silicon Valley venture capital firm DCVC. His firm is a major investor in companies that work closely with the U.S. defense and intelligence communities. “It’s not acceptable for major pools of U.S. capital to fund AI chips and other PRC (Chinese) military tech that threatens U.S. national security.”
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I've been seeing this news for a few days, and it's kind of a nonstory. I mean, of course the ban helps domestic Chinese firms; it functions as if China had infinite tariffs on the import of the banned products.
It's a dumb news angle, though, because the point of the ban has nothing to do with any effect on China's domestic chip firms. The point is to cripple other private firms and the government, which it will do because China's domestic suppliers can't provide a worthy substitute today.
They won't have a worthy substitute in the future, either. There are plenty of examples of industries where Chinese domestic firms enjoy protection from foreign competition: ride share, telecom infrastructure hardware, phones. Has China incubated any products worthy of international primacy from the comfort of protection from foreign competition? Not really.
These Chinese firms will build some products that work but with laughable specs by international standards -- and the products will mostly stay that way.
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Isn't Chinese chip tech like 10+ years behind the rest of the world? And aren't all their innovations just the result of stolen IP?
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They just figured out how to make their own ballpoint pens recently so now they're really picking up steam.
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Yep, they're definitely behind. Catching up would involve making themselves welcome as a customer among the international vendors for fab equipment. No one just makes their own fabs anymore. There are many nearly singular, essential suppliers that the most advanced fabs leverage.
Also, I didn't even get into the whole "sanctions make stealing the IP harder" side of things.
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