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Tech Column

By Kyan Wang Dec. 14, 2023

Lianhua Health, a Chinese MSG company, came under investigation on Sept. 28 by the Shanghai Stock Exchange for purchasing 628 million yuan (88.6 million USD) worth of Nvidia H800 GPUs, a specialized type of computer chip meant to perform thousands of processes simultaneously. Seeking to pivot its business from selling MSG to generative AI such as Chat-GPT and AI art programs, Lianhua Health invested more than thirty times its liquidity into purchasing American-made AI chips, becoming a stunning, if comical, exemplar of the AI boom of the past year.


The global AI industry is entirely dependent on just a few U.S. companies—primarily Nvidia—producing GPUs, as the GPUs provide immense amounts of processing power needed to train enormous AI models. Even with the increased efficiency of specialized GPUs, University of Washington researchers estimated that training Chat-GPT consumed enough electricity to power a city of one million people for almost eight hours. As future AI models become even more complicated, the need for GPUs will only continue to increase.


Amidst the U.S.-China trade war, advanced computer chips have become a battleground as the U.S. seeks to limit the growth of China’s AI industry. The U.S. hopes to prevent advanced chips—especially those designed for AI applications—from being used by China for “military purposes and modernization,” per CNBC. Starting on Oct. 7, 2022, the U.S. limited the specifications of GPUs that could be exported to China, primarily Nvidia’s flagship H100 and A100 GPUs.


In an attempt to work around such restrictions, Nvidia introduced H800 and A800 versions of the aforementioned GPUs in Nov. 2022, which featured much of the same specifications, but with an inter-GPU data transfer rate of half the original versions. Despite these downgrades, the chips were in extreme demand in China. Even with the tightened restrictions on export-bound GPUs placed on Oct. 17 making the new chips unsellable, Nvidia plans to continue exporting AI chips to China; it is launching the new H20, L20 and L2 chips which comply with U.S. sanctions. Nvidia projects that billions of dollars will be made with the exports, and the company does not plan to halt sales while demand is still sky-high.


AI remains the fastest and most unpredictable field in tech today, and as the all-encompassing demand for processing power continues, so does Nvidia’s pocketbook. With their stock prices tripling this year alone, Nvidia may be the winner in the technological conflict between the U.S. and China.


 

About the Contributor



Kyan Wang is a junior at Leland High School and is the page editor for Science & Tech and Feature US for The Charger Account. When not being crushed by imminent deadlines, he enjoys listening to music, wasting away on his computer, and running on the rare occasion that he is not debilitatingly injured.


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