Chinese firms keep innovating despite restrictions

As the administration of United States President Donald Trump decides whether it will continue restricting the export of high-end processors, Chinese companies have been developing their own chips and seeking domestic alternatives.

Tech giant Baidu Inc has unveiled the latest generation of its Kunlun chips and the upgraded version of its large language model Ernie 5.0, marking a significant step in AI innovation.

The Kunlun M100 chip is designed for large-scale inference scenarios of AI models and is scheduled to launch early next year, according to the company. Its Kunlun M300, to be released in 2027, will cater to ultra-large-scale, multimodal model training and inference.

The Kunlun chips are critical to reducing reliance on foreign graphics processing units, lowering costs and ensuring performance scalability, said Charlie Dai, vice-president and principal analyst at research company Forrester.

The launch of multimodal large language models and products such as interactive digital humans positions Baidu AI Cloud to drive efficiency and innovation across industries, including e-commerce, manufacturing and autonomous vehicles, Dai said.

Trump has previously stated that his administration would not allow China to win the AI race, and it is still deciding whether to allow chip giant Nvidia to export its most advanced processors to Chinese companies.

Michael Kratsios, director of the White House Office of Science and Technology Policy, sees the restrictions as a way to maintain the US lead in AI development, despite the large strides China has made in the field.

"The first big thing we have to do is make sure that we lead on innovation, meaning that the US has to be the home where the next great AI discoveries happen," he said during a Wall Street Journal podcast published on Friday.

"We need a regulatory system that can allow our greatest AI technology companies and our AI innovators to actually deploy those technologies."

Growing share

Nvidia's CEO Jensen Huang estimated that China's AI chip market was worth $50 billion and would grow to $200 billion in five years. He worried that export restrictions would cut US companies out of a growing share of that market.

"I can't imagine any policymaker thinking that's a good idea, that whatever policy we implemented caused America to lose one of the largest markets in the world," Huang said.

Experts say embracing intelligent transformation and developing new quality productive forces are the most powerful drivers in the current era.

"Currently, only the US and China are truly competitive players at the AI table," said He Hui, semiconductor research director at technology research firm Omdia in London.

"Without the Chinese market, the AI industry's growth narrative by Nvidia can't expand further," she warned last month.

"The Nvidia CEO has consistently emphasized the rapid catch-up by Chinese companies, which is actually a wake-up call to the US government that further restrictions on US AI chips to China will only motivate Chinese companies to grow even faster."

shiguang@chinadailyusa.com