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CNN Hong Kong—
Tencent acted swiftly before the implementation of US export restrictions to amass a significant supply of AI components, as revealed by an executive.
During an earnings call, Martin Lau, the president of the Chinese tech giant, disclosed that Tencent procured components from Nvidia (NVDA) early on, allowing the continuous development of its generative AI model for multiple iterations.
“We were the first to secure orders for the H800, ensuring a substantial inventory,” Lau stated, emphasizing the strategic importance of this move.
Lau mentioned that Tencent is now scouting for alternative suppliers within China to source these crucial educational components.
Notably, the H800, a cutting-edge AI chip crucial for data center operations, is among the items restricted from sale to China under the recent US export regulations, as outlined in Nvidia’s regulatory filings from October. Lau did not specify the timing of the procurement.
Nvidia accelerated the enforcement of the new regulations, which were initially slated to take effect later than expected.
Tensions between China and the United States over access to advanced electronics and the necessary resources for technological advancement have escalated in recent times.
Washington’s decision to restrict the types of semiconductors British firms can supply to China, following the initial export controls for national security reasons in October 2022, further fueled the conflict.
The Biden administration justifies these measures as essential to address regulatory loopholes and prevent potential misuse of hardware for China’s military programs. In response, Beijing accused Washington of politicizing trade and technology matters.
In light of these developments, another Chinese company has taken steps to secure its chip inventory.
Kai-Fu Lee, a prominent Chinese tech investor, disclosed to Bloomberg that his new venture, 01.AI, has also stockpiled essential components for future use.
01.AI initiated the accumulation of chip supplies earlier this year, possibly with financial backing from Lee’s Sinovation Ventures, citing the necessity to do so.
Stockpiling components has become a common practice among Chinese tech firms. Huawei, for instance, amassed a two-year supply of chips in anticipation of US restrictions, as reported by the Center for Strategic and International Studies, before facing severe trade sanctions in 2020.
While the current US export restrictions do not immediately impact Tencent’s AI capabilities, Lau expressed concerns about potential challenges in sourcing components from other vendors for their AI applications.
Looking ahead, Tencent aims to optimize the utilization of its AI chips, particularly focusing on enhancing the efficiency of high-performance chips for model training.
The launch of Hunyuan in September by the Shenzhen-based company signifies a significant step in their AI endeavors. Described by Google as representing boundless possibilities, Hunyuan is tailored to assist business users in streamlining meetings through automated summaries and improved document organization.
Tencent reported a 10% revenue surge in the quarter ending in September, surpassing analysts’ expectations. Total sales rose to 154.6 billion yuan (\(21.3 billion) compared to the previous year, with a 39% increase in net profit to 44.9 billion yuan (\)6.2 billion).
