Chinese cloud computing provider UCloud warns of risk of securing orders for Nvidia’s advanced chips due to high demand and tightened US caps

Chinese cloud computing provider UCloud Technology Co said it faces uncertainty in sourcing advanced semiconductors from Nvidia Corp due to high demand, as US export restrictions on such chips continue to hamper efforts. of artificial intelligence (AI) development of China.

Shanghai-based UCloud, which offers Infrastructure-as-a-Service and AI service platforms to Internet companies and traditional enterprises, told investors on Monday that its orders for Nvidia’s A800 graphics processing unit (GPU), which can be exported to China, have arrived gradually and have had a “limited contribution” to the company’s operations.

“The company’s procurement cycle is affected by various factors, and there are uncertainties in terms of delivery times and quantities of the remaining GPUs we have ordered,” UCloud wrote in response to investor questions about its A800 order via the online service. of the Shanghai Stock Exchange. question and answer platform.

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“The company will continue to track the supply. Please be aware of the investment risks,” he said.

The first phase of UCloud Technology Co’s new Shanghai data center was completed in January. Photo: Handout alt=The first phase of UCloud Technology Co’s new Shanghai data center was completed this January. Photo: Pantry>

During its latest roadshow with the bankers, UCloud said it had placed orders for Nvidia’s A800 and H800 GPUs, both of which are China-export modified versions of its much-sought-after A100 and H100 products, but declined to disclose the amount of your purchase, according to the company’s separate filing.

UCloud announced those orders in June alongside the launch of cloud infrastructure equipped with high-performance computers specifically for developing AI models, a new offering designed for various domestic initiatives to build ChatGPT-like services.

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That UCloud service and the AI ​​development initiatives of Chinese companies, however, were undermined by a US government ban imposed last August on the export to China of some products by chip suppliers Advanced Micro Devices and Nvidia , which has a near monopoly on the GPUs used to train AI systems.

UCloud’s uncertainty about securing an adequate supply of Nvidia’s GPUs underscores China’s massive demand for advanced semiconductors to power new AI development projects, which has already created a rapidly growing local market for bootlegged GPUs.

China’s AI ambitions could take a fresh hit as the US government is said to be considering restricting Chinese companies’ access to American cloud computing services, which would prevent Amazon Web Services and Microsoft Corp to use the power of advanced AI chips to benefit their mainland Chinese customers, according to a Wall Street Journal report on Tuesday.

Cloud computing services allow businesses to buy, sell, lease or distribute a range of software and other digital assets as an on-demand service over the Internet, much like electricity from a power grid. These resources are managed within data centers.

For now, major Chinese companies are still eager to grab Nvidia GPUs on the market because there are few viable alternatives available.

Chinese internet giant Tencent Holdings, for example, introduced new servers for training large-scale AI models based on Nvidia’s H800 GPUs in April. ByteDance, owner of TikTok and Douyin, reportedly ordered $1 billion worth of Nvidia GPUs this year.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice covering China and Asia for more than a century. For more SCMP stories, explore the SCMP app or visit the SCMP Facebook page and Chirping pages. Copyright 2023 South China Morning Post Publishers Ltd. All rights reserved.

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