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China Offers ‘Computing Vouchers’ to Small AI Startups

China AI

China is reportedly taking measures to help its rising AI startups compete with tech giants.

As the Financial Times (FT) reported Monday, at least 17 cities have committed to offering “computing vouchers” for startups to help them pay for increasing data center costs amid a shortage of the type of chips that are vital to the artificial intelligence (AI) sector.

Those vouchers, the report said, will be worth the equivalent of between $140,000 and $280,000, and can be used for time in AI data centers where companies can train and run large language models (LLMs).

According to the report, industry experts say the move comes after internet companies with cloud computing services voided their contracts. That was because tougher measures in the U.S. led them to “hog the GPUs [graphics processing units] for themselves,” as one AI founder told the Financial Times.

The report, citing multiple unnamed sources familiar with the matter, noted that tech giants have taken steps to limit the rental of Nvidia’s GPUs and have reserved most of these stockpiled AI processors for in-house use and key clients.

This follows two years of limits by the White House on China’s access to AI chips, which has led companies to either stockpile chips or repurpose Nvidia gaming chips or resort to the black market, the report said.

“The scarcity of the expensive AI chips upon which OpenAI and other AI companies rely has been a concern for the companies,” PYMNTS wrote last month. “Nvidia currently dominates the chip market with a global market share of greater than 80%.”

That dominance has helped turn Nvidia into a $2 trillion company, and placed it at “the center of a generative AI revolution that quite literally cannot run without its products,” as reported here.

“We have the speed, scale and reach to help every company in every industry become an AI company,” Jensen Huang, founder and CEO of Nvidia, said during the company’s most recent quarterly earnings call. “The year ahead will bring major new product cycles with exceptional innovations to help propel our industry forward.”

Meanwhile, PYMNTS last year explored China’s role as the first major market economy to regulate AI.

That report noted that, given China’s status as the world’s largest producer of AI research, its oversight of the industry “will certainly add necessary context around the underlying structures and technical feasibility of different regulatory approaches.”