AI Chips

Alibaba’s shares rose after reports of a deal with China Unicom to use its AI chips, boosting China’s domestic semiconductor efforts. China Unicom will deploy Alibaba’s Pingtouge AI accelerators for a large-scale data center project, also using chips from MetaX and Biren. This move aligns with China’s push for self-reliance amidst geopolitical tensions and export restrictions on advanced AI chips, particularly as Nvidia faces regulatory hurdles. Alibaba is developing new AI chips and operates a major cloud platform, further emphasizing its role in China’s AI landscape.

Broadcom’s stock surged after announcing a $10 billion commitment from a new customer, widely speculated to be OpenAI for custom AI chips (XPUs). CEO Hock Tan highlighted the order’s impact on Broadcom’s AI revenue forecast, with shipments expected in 2026. Analysts believe the partnership will optimize OpenAI’s AI models and strengthen Broadcom’s position in the AI market, where it competes with Nvidia. Broadcom’s Q3 results exceeded expectations, with projected Q4 revenue reaching $17.4 billion.

Nvidia CEO Jensen Huang suggests a possible introduction of the Blackwell processor to China, advocating for eased U.S. restrictions. He anticipates a robust 50% growth in China’s AI market. Huang previously sought export licenses for the H20 chip, reaching an agreement involving revenue sharing with the U.S. government. Nvidia may need to modify Blackwell chips to comply with export rules, balancing cutting-edge technology deployment with national security. Despite uncertainties, Nvidia projects strong revenue, highlighting China’s $50 billion potential market value.

Cambricon, a Chinese semiconductor firm, reported significant revenue and profit growth in the first half of the year, driven by the increasing demand for AI chips. This surge reflects China’s strategic push for domestic AI chip alternatives to Nvidia amidst potential US export restrictions. While Nvidia still dwarfs Cambricon in overall revenue, the Chinese government’s support and diversified sourcing strategies are boosting Cambricon’s prospects. The company is focused on improving its software to compete more effectively. However, export controls pose a challenge to long-term technological advancement.

Cambricon, a Chinese AI chip company, has received approval from the Shanghai Stock Exchange for a RMB 4 billion private placement. The funds will be used for AI chip and software platform development, particularly for large-scale AI models, and to supplement working capital. Cambricon’s Q1 2025 revenue surged by 4230.22% year-on-year, with net profit also significantly increasing. The company focuses on cloud, edge products, and IP licensing, aiming to build a comprehensive AI ecosystem.

Nvidia and AMD have agreed to remit 15% of their AI chip sales revenue in China to the U.S. government in exchange for export licenses. The White House confirmed the arrangement, initiated by the Trump administration, aims to reduce U.S. national debt, which exceeds $37 trillion. Nvidia’s H20 chip is currently the primary product affected. The Treasury Secretary sees this as mutually beneficial, allowing Nvidia to maintain its Chinese market presence while benefiting American taxpayers. This agreement may extend to other companies and sectors in the future.

NVIDIA’s H20 AI chip, designed for the Chinese market, faced export restrictions but received conditional clearance in mid-July, requiring a 15% revenue remit to the U.S. government. Despite this, H20’s future in China is uncertain. NVIDIA defends its H20 exports, emphasizing the U.S.’s need to compete with China in AI and avoid repeating the 5G situation where it lost its leadership position. They believe U.S. AI can become the global standard if the U.S. actively participates in the competition.

The U.S. maintains a strict stance on AI chip exports to China, particularly regarding advanced technology like Nvidia’s “Blackwell” chip. Former President Trump opposes its sale to China, citing national security concerns and the potential for accelerating Chinese AI development. He believes the U.S. holds a significant technological advantage in chip design. Nvidia’s CEO is expected to discuss export licenses, highlighting ongoing negotiations. While some argue restricting access could spur indigenous Chinese chip development, the U.S. aims to limit China’s access to cutting-edge AI capabilities.

Reports suggest NVIDIA has secured a deal with Samsung for its 12-layer stacked HBM3E memory, potentially for use in liquid-cooled server systems. The initial order is rumored to be 30,000-50,000 units. Samsung has neither confirmed nor denied the agreement. While previous validation claims proved premature, Wall Street analysts are optimistic that Samsung will complete certification by the end of August and begin shipments to NVIDIA in Q4. Samsung aims to reduce HBM3E production costs and expects increased HBM profitability.

Tesla is reportedly shutting down its Dojo project, a move indicating a shift towards external partnerships for its AI needs. Head of Dojo, Peter Bannon, is expected to leave. Tesla plans to enhance collaborations with Nvidia and AMD for computing, and deepen its partnership with Samsung in chip manufacturing, evidenced by a $16.5 billion deal. Samsung will reportedly produce Tesla’s AI6 chip, while TSMC will manufacture the AI5. Tesla also plans to diversify Dojo’s supply chain, engaging Samsung and Intel for chip manufacturing and packaging.