In a significant breakthrough for China, Ant Group has utilised Chinese-made semiconductors to develop artificial intelligence (AI) training techniques, achieving a cost reduction of 20%, Bloomberg reported. The development signals a shift in competition between Chinese and US tech companies, particularly under the constraints of US export controls on advanced chips, especially to China.
Ant used domestic chips, including from affiliate Alibaba and Huawei Technologies, to train models using the so-called Mixture of Experts machine learning approach, the company earlier this month said in a paper. The Ant Group achieved results comparable to those obtained from Nvidia's H800 chips, despite American restrictions on these components.
The tech world has taken note of the development with entrepreneur Arnaud Bertrand hinting that this could signal a Chinese win over the US sanctions. "This is big. I think we're reaching the stage where we can confidently say that China defeated the US semiconductors sanctions," Bertrand, who founded HouseTrip and Me & Qi, tweeted Monday.
Why is this significant
Ant's entry into the AI race underscores the burgeoning capabilities of Chinese technology. The paper claims that Ant's models sometimes outperformed those of Meta Platforms Inc in specific benchmarks. If validated, these claims could signal a significant advantage for Chinese AI development. "Which is exactly what the semiconductors export controls sought to prevent, according to multiple statements by US officials," Bertrand added in his post on X.
While Ant continues to employ Nvidia for some AI development tasks, there is a growing reliance on alternatives such as those from Advanced Micro Devices and other Chinese chipmakers. The trend reflects a wider movement among Chinese firms to seek local substitutes for foreign technologies.
Ant's advancements represent a step towards AI self-sufficiency in China, focusing on lower-cost, computationally efficient models. The company reported that training 1 trillion tokens incurred a cost of 6.35 million yuan, with optimised methods potentially reducing this cost to 5.1 million yuan by using less advanced hardware.
What is the US semiconductor sanction on China?
In December 2024, the US Department of Commerce expanded its export controls to impair China's indigenous production of advanced semiconductors and related technologies. This includes restrictions on tools used for semiconductor manufacturing and high-bandwidth memory components.
The US added 140 entities to its Entity List, which restricts American companies from exporting technology to these companies/firms without a special license. Many of these newly designated entities are Chinese firms involved in semiconductor production and development, particularly those supporting China's military-civil fusion strategy.
These restrictions were primarily aimed at curtailing China's ability to produce advanced semiconductors that could support military applications and technological advancements. China, in turn, retaliated by initiating investigations into US chip manufacturers, alleging unfair trade practices and considering potential tariffs on American imports.