A new AI video-generating model, Kling, developed by Beijing-based Kuaishou, is now widely available but with significant limitations. Initially launched in a waitlisted access for users with Chinese phone numbers, Kling can now be accessed by anyone providing their email. The model generates five-second videos based on user prompts, simulating physics like rustling leaves and flowing water with a resolution of 720p.
However, Kling censors politically sensitive topics. Prompts related to ‘Democracy in China,’ ‘Chinese President Xi Jinping,’ and ‘Tiananmen Square protests’ result in error messages. The censorship occurs at the prompt level, allowing for the generation of videos related to these topics as long as they are not explicitly mentioned.
That behaviour likely stems from intense political pressure from the Chinese government. The Cyberspace Administration of China (CAC) is actively testing AI models to ensure they align with core socialist values and has proposed a blacklist of sources for training AI models. Companies must prepare models that produce ‘safe’ answers to thousands of questions, which may slow China’s AI development and create two classes of models: those heavily filtered and those less so.
The dichotomy raises questions about the broader implications for the AI ecosystem, as restrictive policies may hinder technological advancement and innovation.
Samsung’s high bandwidth memory chips HBM3 have been approved by Nvidia for use in its AI processors, specifically for the H20 chip developed for the Chinese market, in compliance with the US export controls. Samsung may begin supplying these chips to Nvidia starting in August.
Despite Samsung being one of the world’s largest memory chip manufacturers, it still needed help to get Nvidia to certify its HBM chips. It is still being determined if Nvidia will use Samsung’s HBM3 chips in its other AI processors or if further testing is required. Meanwhile, Samsung’s fifth-generation HBM3E chips are still being tested to meet Nvidia’s standards.
Why does it matter?
AI chips require large amounts of high-speed memory, and HBM is a type of dynamic random access memory (DRAM) with a uniquely stacked memory chip design, which provides the necessary speed and capacity. Although HBM was introduced in 2013, its demand has risen drastically with the AI boom in recent years. Currently, only Micron, Samsung, SK Hynix manufacture HBM chips, and Nvidia have already certified HBM3 chips from Micron and SK Hynix, but there remains a shortage. Thus, Nvidia’s decision to approve Samsung’s HBM3 chips enables Nvidia to expand its supply chain and meet the deficit demand.
The United States is the undisputed global leader in AI startups and private-sector investment, according to a report by S&P Global. Between 2013 and 2023, 5,509 AI companies were founded in the US, eclipsing all other countries combined. China, the runner-up, saw 1,446 AI startups during the same period. The United Kingdom, Israel, and Canada followed with 727, 442, and 397 startups, respectively.
Investment in AI also heavily favours the US, with $335.2 billion poured into the sector over the past decade. China’s private-sector investment totalled $103.7 billion, while the UK, Israel, and Canada saw investments of $22.3 billion, $12.8 billion, and $10.6 billion, respectively. The report noted, however, that government investment, particularly in China, is significant and less transparent.
China’s approach to AI is shaped by its government’s ideological demands. The Cyberspace Administration of China (CAC) tests AI models to ensure they align with ‘core socialist values.’ AI companies must monitor content to avoid sensitive topics, including political dissent and references to historical events like the Tiananmen Square massacre.
S&P Global anticipates that private investments in AI startups could reach up to $900 billion globally by 2027, reflecting an annual growth rate of at least 70%. Meanwhile, China’s stringent regulatory environment continues to influence the development and deployment of AI technologies within its borders.
According to sources, Nvidia is developing a version of its flagship AI chips for the Chinese market to comply with US export controls. The new chip, part of the ‘Blackwell’ series unveiled in March, is expected to be produced later this year. The ‘B200’ model in this series significantly outperforms its predecessor in tasks like chatbot responses. Nvidia is collaborating with its major Chinese distributor, Inspur, to launch this chip, tentatively named the ‘B20.’
In response to tighter US export controls introduced in 2023 to prevent advancements in Chinese supercomputing, Nvidia has created three chips specifically for China. Despite initial setbacks with the H20 chip, sales have surged, with projections of over 1 million units sold in China this year, amounting to over $12 billion. These developments highlight Nvidia’s strategic efforts to maintain its market presence amidst growing competition from Chinese firms like Huawei.
As the US continues to enforce and potentially expand semiconductor-related export restrictions, Nvidia’s actions reflect the broader impact on the global chip industry. The Biden administration’s plans to implement stricter controls on AI technology and efforts to influence policies in other major tech-producing countries underscore the ongoing geopolitical tensions in the semiconductor sector.
Chinese companies have access to the much coveted Nvidia AI chips through their access to online cloud services owned by Google and Microsoft. The two American tech giants and other international companies rent to Chinese firms operating off-shore Nvidia-powered servers to power their data centres.
These and several other cloud service providers, including several AI startups, offer such services to companies across the globe. However, cloud service providers are based in more than just the US. Many operate out of Asia and Europe.
China’s access to these advanced AI semiconductors is noteworthy as the industry continues to benefit from an upswing, and the Biden administration continues to pressure local companies to ensure they uphold export regulations in place, targeting the ban on China.
The US Department of Commerce Secretary, Gina Raimondo, lamented the security risk China’s access to these chips poses to national security and promised to do more to prevent companies from skirting the legislation.
The USA is considering stricter trade regulations amidst its efforts to restrict China’s access to advanced semiconductor technology, according to a report by Bloomberg News.
In response to resistance, US officials have notified allies about potential stringent trade restrictions targeting companies that facilitate China’s technological advancements, such as Tokyo Electron and ASML Holding NV.
One of the measures under review is the Foreign Direct Product Rule (FDPR), introduced in 1959 to oversee the trade of US technologies. This provision empowers the US government to block the sale of products made using American technology, even if they are manufactured abroad.
Sources cited by Bloomberg report that US officials are in discussions with counterparts in Tokyo and The Hague, proposing this as a probable course of action if allied nations do not strengthen their own measures against China.
ASML declined to comment on these discussions, while Tokyo Electron stated it cannot comment on geopolitical matters. Requests for comment from Tokyo Electron, ASML Holding, and the US Department of Commerce were not immediately answered.
Chinese tech giants Alibaba, Tencent, and Baidu have made only limited progress in meeting their renewable energy goals, according to a recent Greenpeace East Asia report. The sector’s power consumption is expected to surge due to growing demand for AI and cloud services, prompting calls for more robust action against climate change.
The report tracked the renewable energy use of top 25 cloud providers and data centre operators in China. Although Alibaba, Tencent, and Baidu led in renewable energy procurement and carbon reduction measures, significant disparities remain across the industry. Only five companies reported annual renewable energy ratios exceeding 10%, a notable increase from just one company in 2022.
Despite these advances, only eight companies have committed to 100% renewable energy use by 2030, and only six have set carbon neutrality goals for their direct and indirect emissions. Greenpeace stressed the need for the tech sector to rapidly expand renewable energy consumption to meet the projected 160% increase in power demand for data centres by 2030, driven by AI development.
A new survey reveals that China is at the forefront of adopting generative AI (GenAI), the technology that can generate images, text and video in response to prompts. Conducted by AI and analytics software company SAS and Coleman Parkes Research, it found that 83% of Chinese respondents are using generative AI.
When it comes to full implementation of GenAI technologies, the United States with 24% compared to China’s 19% and the United Kingdom’s 11%. The industries surveyed included banking, telecommunications, insurance, healthcare, manufacturing, retail, and energy, with the two former showing the highest integration and use of generative AI.
OpenAI’s recent announcement to ban Chinese users from accessing ChatGPT is not expected to have drastic effects on use. Chinese alternatives like SenseTime and Baidu are expected to replace ChatGPT. SAS actually expects Chinese adoption to accelerate as competition lowers the cost of GenAI for businesses.
The SAS report also highlighted that China leads the world in continuous automated monitoring (CAM), which involves collecting and analysing user data, behaviour, and communications. Udo Sglavo, vice president of applied AI and modelling at SAS, noted that this raises concerns about privacy infringements. Despite regulation still being behind the implementation AI, companies are increasingly emphasising on their own privacy policies to accompany the rollout of their AI tools. OpenAI and Apple’s recent partnership will focus on AI privacy for the integration of ChatGPT into Siri.
A recent poll by the AI Policy Institute has shed light on strong public opinion in the United States regarding the regulation of AI.
Contrary to claims from the tech industry that strict regulations could hinder competition with China, a majority of American voters prioritise safety and control over the rapid development of AI. The poll reveals that 75% of both Democrats and Republicans prefer a cautious approach to AI development to prevent its misuse by adversaries.
The debate underscores growing concerns about national security and technological competitiveness. While China leads in AI patents, with over 38,000 registered compared to the US’s 6,300, Americans seem wary of sacrificing regulatory oversight in favour of expedited innovation.
Most respondents advocate for stringent safety measures and testing requirements to mitigate potential risks associated with powerful AI technologies.
Moreover, the poll highlights widespread support for restrictions on exporting advanced AI models to countries like China, reflecting broader apprehensions about technology transfer and national security. Despite the absence of comprehensive federal AI regulation in the US, states like California have begun to implement their own measures, prompting varied responses from tech industry leaders and policymakers alike.
The Biden administration announced a plan to allocate up to $1.6 billion to advance technology for packaging computer chips, a crucial step to maintain the US edge over China in fields like AI. The funding, authorised under the 2022 CHIPS Act, aims to innovate faster data transfer methods between chips and manage their heat generation. Laurie Locascio, an under-secretary in the Commerce Department, announced the initiative at an industry conference, signalling companies to apply for grants up to $150 million each.
The CHIPS Act, which received bipartisan support, allocates $52 billion to bolster domestic chip production, mainly focusing on factories that transform silicon wafers into chips. The US currently contributes about 10% to this industry, with much of the activity outsourced to Asia. Packaging, an essential process that attaches finished chips to substrates, is primarily done in Taiwan, Malaysia, South Korea, the Philippines, Vietnam, and China. The US handles only about 3% of advanced chip packaging.
Why does it matter?
Federal funding will target the next stages of chip production, ensuring chips made in the US can be sent to somewhere other than Asia for packaging to reduce dependence on foreign companies. The shift aligns with the industry’s push for perfecting computing performance by combining multiple chips. Companies like Nvidia and Intel are already making strides in this area, with federal support helping to keep US firms at the forefront of technology. The new grants are part of a $3 billion initiative under the National Advanced Packaging Manufacturing Program, aiming to foster innovation and self-sufficiency in the semiconductor sector.
