Baidu Says Chinese Buyers Want Local AI Chips Due to ‘Supply Chain’ Issues

"mrcoolbp" writes:

It seems like Nvidia's not getting back into the Middle Kingdom anytime soon:

Chinese web giant Baidu yesterday told investors it sees good days ahead for its Kunlunxin chip biz, because local buyers won't have alternatives.

Baidu has previously said it plans to spin out and float Kunlunxin, which makes CUDA-compliant inferencing chips that it uses for its own cloud services and has sold to the likes of Huawei and ZTE, who use them in kit they sell to Chinese telcos.

Speaking on the company's Q2 earnings call, Dou Shen, executive veep of Baidu's AI Cloud Group, said Baidu is working to list Kunlunxin and will have concrete info to share soon.

"From a business perspective, we remain very confident in Kunlunxin's long-term growth and commercial potential for a few reasons," he said. One of those reasons is that demand for inferencing continues to rise, and Baidu thinks that trend will continue for the long term.

His second reason was that China's domestic market has "significant growth potential" because supply of AI chips is "likely to remain constrained for some time."

"Against this backdrop, customers are increasingly seeking high performance, reliable, and cost-efficient domestic AI chips."

Those remarks are notable in the context of the US government's policy to allow Nvidia to resume sales of its products into China, and Beijing's response of giving itself a veto over any purchases by local companies.

After Washington banned Nvidia from selling its products in China, the company said that decision cost it $10.5 billion in six months. In its most recent results announcement the GPU giant said it had not won any revenue in China after the USA's policy reversal, and is "uncertain whether any imports will be allowed into the country."

And now Baidu is saying Chinese buyers are looking to local chips due to supply challenges.

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