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Chinese firm UCloud raises market uncertainty in securing advanced Nvidia chips
Shanghai-based UCloud had placed orders for Nvidia’s A800 and H800 graphics processing units, which are both modified versions for export to China of the highly in-demand A100 and H100 products.
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- Shanghai-based UCloud told investors that there are uncertainties, in terms of delivery time and quantity, to securing its latest order of Nvidia GPUs
- The firm had placed orders for Nvidia’s A800 and H800 GPUs, which are both modified versions of the highly in-demand A100 and H100 products
Shanghai-based UCloud Technology Co offers infrastructure-as-a-service and artificial intelligence service platforms to internet firms and traditional enterprises. Photo: Handout
Chinese cloud computing services provider UCloud Technology Co said it faces uncertainty in securing advanced semiconductors from Nvidia Corp amid high demand, as tightened US export restrictions on such chips continue to impede China’s artificial intelligence (AI) development efforts.
Shanghai-based UCloud, which offers infrastructure-as-a-service and AI service platforms to internet firms and traditional enterprises, on Monday told investors that its orders of Nvidia’s A800 graphics processing units (GPUs), which are allowed for export to China, have arrived gradually and have had “limited contribution” to the company’s operations.
“The procurement cycle of the company is affected by various factors, and there are uncertainties in terms of the delivery time and quantity of the remaining GPUs we ordered,” UCloud wrote in response to investor inquiries about its A800 order through the Shanghai Stock Exchange’s online question-and-answer platform.
“The company will continue to follow up on the supply. Please be aware of the investment risks,” it said.
During its latest roadshow with bankers, UCloud said that it had placed orders for Nvidia’s A800 and H800 GPUs, which are both modified versions for export to China of the highly in-demand A100 and H100 products, but declined to reveal the quantity of its purchase, according to a separate filing by the company.
UCloud announced those orders in June along with its launch of cloud infrastructure equipped with high-performance computers specifically for the development of AI models, a new offering designed for various domestic initiatives to create ChatGPT-like services.
That UCloud service and Chinese firms’ AI development initiatives, however, have been undermined by a US government ban imposed last August on the export to China of certain products from chip suppliers Advanced Micro Devices and Nvidia, which has a near monopoly on GPUs used to train AI systems.
UCloud’s uncertainty in securing an adequate supply of Nvidia’s GPUs underscore China’s massive demand for advanced semiconductors to power new AI development projects, which has already created a fast-growing local market for smuggled GPUs.
China’s AI ambitions could face a fresh blow as the US government is said to be considering restricting Chinese companies’ access to American cloud computing services, which would stop Amazon Web Services and Microsoft Corp from using the power of advanced AI chips to benefit their mainland clients, according to a report by The Wall Street Journal on Tuesday.
Cloud computing services enable companies to buy, sell, lease or distribute a range of software and other digital resources as an on-demand service over the internet, just like electricity from a power grid. These resources are managed inside data centres.
For now, major Chinese companies are still eager to snap up Nvidia GPUs in the market because there are few viable alternatives available.
Chinese internet giant Tencent Holdings, for example, introduced in April new servers for large-scale AI model training that are based on Nvidia’s H800 GPUs. TikTok and Douyin owner ByteDance has reportedly ordered US$1 billion worth of GPUs from Nvidia this year.
