IBM, following the closure of its China Research Laboratory earlier this year, is now facing fresh reports of layoffs in the region. According to Chinese media Jiemian News, over 1,000 employees across Beijing, Shanghai, Dalian, and other locations have recently had their access to IBM’s research and testing systems revoked. Affected staff have been notified to attend an online meeting on August 26.

Jiemian News reported on the 24th that several IBM China employees confirmed the access revocations occurred the previous evening. A lab technician noted that there were no prior warnings, with employees continuing their regular work hours—even working overtime—until the sudden access shutdown. Those impacted have been removed from the company’s product group chats and are unable to access the internal network via VPN, although they still have email access.

The affected employees are primarily from IBMV, which is under the IBM China Development Center and IBM China Systems Center, focusing on research and testing. The revocations span multiple cities, involving over 1,000 staff.

Jiemian News reached out to IBM China for comment, but no response had been received at the time of publication.

IBM has undergone several rounds of layoffs globally in the past two years. In January 2023, the company announced 3,900 job cuts, and later that year, it paused hiring while planning to replace nearly 8,000 roles with AI. Reports from March indicated some departments faced cuts as high as 80%.

IBM China has also seen layoffs over the past year. An internal employee noted that a product line at the China Development Center was axed last year, and some workers reported receiving layoff notices in March, with their departures finalized by late July.

In addition to the changes at IBM China, the Central News Agency reported that China’s economy is currently in a downturn. Earlier, online rumors suggested that Microsoft would close all of its physical stores across China starting July 1, leaving only its official online store and JD.com flagship store. A Microsoft spokesperson confirmed to the media that the company has decided to streamline its sales channels in China, and customers can still purchase products and access services through retail partners and the official website.

According to the latest report from China’s Yicai, IBM has confirmed it will completely shut down its R&D division in China, impacting over 1,000 employees. While IBM’s primary clients in the region have historically been large state-owned enterprises in critical sectors like finance and energy, the company now plans to shift its focus to serving private enterprises in China and select multinational companies operating there.

(Photo credit: IBM)

On July 4th, the EU announced a provisional anti-subsidy tariff on electric vehicles imported from China, with a final decision set for October 30th. On August 20th, the EU released a draft decision regarding the final anti-subsidy tariffs, adjusting the rates for different Chinese electric vehicle manufacturers based on the latest investigation progress.

Notably, as per a report from Commercial Times, the tariff on Tesla’s electric vehicles has been reduced from 20.8% in July to 9%. Tariffs on vehicles from BYD and Geely have also been slightly lowered.

On August 20th, the European Commission disclosed its draft decision on the final anti-subsidy investigation for electric vehicles imported from China, making slight adjustments to the proposed rates.

Tesla saw the most significant reduction, while BYD and Geely received minor cuts. Specifically, BYD’s tariff rate was reduced from 17.4% to 17%, and Geely’s from 19.9% to 19.3%.

Additionally, other companies that the EU deemed cooperative will face a tariff of 21.3%. Chinese automakers and SAIC Motor, which were assessed as not fully cooperating with the investigation, will have their tariffs adjusted from 37.6% to 36.3%.

The European Commission also decided not to retroactively impose the anti-subsidy tariffs, with the final decision expected by October 30th.

The EU maintains the opinion that Chinese electric vehicle production benefits from extensive government subsidies and thus proposes a final tariff of up to 36.3%, slightly lower than the provisional 37.6% tariff imposed on Chinese imports in early July.

In response, the China Chamber of Commerce to the EU expressed concerns, stating that both the development of the European automotive industry and reports from the EU itself show insufficient evidence that Chinese new energy vehicles have caused substantial harm to the EU market.

Source: China Chamber of Commerce

The Chamber criticized the EU’s decision to impose trade measures based on a perceived “threat of injury,” arguing that this approach contradicts WTO principles and is unacceptable to the industry.

The Chamber emphasized that the competitive edge of Chinese-made electric vehicles is not due to subsidies but rather stems from industrial scale, supply chain advantages, and intense market competition.

Read more

• [News] EU Plans to Impose Tariffs as High as 38.1% on Chinese Electric Vehicles Amid Trade War
• [News] EU Reportedly Delays Decision on Imposing Tariffs on Chinese Electric Cars

(Photo credit: Pixabay)

As global competition heats up in the AI sector, an emerging power has now joining the battlefield. Ola, an automotive manufacturer in India, plans to launch the country’s first in-house AI chip by 2026, which is based on ARM architecture, according to a report by Wccftech.

Though there are more details yet to be revealed, the report notes that Ola did highlight its key chip offerings, featuring the Bodhi series, which would be the nation’s first self-developed AI chips. The company’s product lineup also reportedly includes the Sarv-1 cloud-native CPUs and the Ojas edge AI chip.

When asked about the potential foundry partners in the future, Ola’s CEO Bhavish Aggarwal mentioned that the company plans to collaborate with a global tier I or II foundry, likely TSMC or Samsung, according to the report.

Ola’s AI lineup is expected to start with the Bodhi-1 AI chip, which is specifically designed for large-scale LLMs, with a focus on inferencing workloads, Wccftech suggests. Positioned as a low-to-mid-tier offering from Ola, the chip is said to be launched by 2026, followed by a more potent successor, the Bodhi-2, slated to be released in 2028.

According to Wccftech, it is worth noting that Ola also introduced an edge AI chip named Ojas, which is likely to be integrated into Ola’s next-generation electric vehicles. In addition, the Sarv-1, specifically designed for cloud computing, is expected to feature ARM Neoverse N3 cores, though this hasn’t been confirmed yet, the report states.

As the world’s fifth largest economy, India seems to be relatively slow in developing its own AI chips. China, the world’s largest developing country, has quite a long history in developing in-house AI chips.

Chinese tech giant Huawei is said to be testing its latest processor, the “Ascend 910C,” with internet companies and telecom operators recently. Reportedly, the company has informed potential customers that this new chip is comparable to NVIDIA’s H100 GPU, which cannot be directly sold in China.

On the other hand, Baidu’s foray into AI chips can be traced back to as early as 2011. After seven years of development, Baidu officially unveiled its self-developed AI chip, Kunlun 1, in 2018. T-Head, owned by Alibaba, introduced its first high-performance AI inference chip, the HanGuang 800, in September 2019.

Read more

• [News] Huawei Rumored to Launch New High-End AI Chip, Potentially Rivaling NVIDIA’s H100
• [News] Global Semiconductor Giants Eyeing India, Anticipating Three New Fabs Valued at USD 8-12 Billion

(Photo credit: Krutrim)

Is the AI bubble about to burst? Two years after OpenAI launched ChatGPT, sparkling a surge in generative AI startups, China has now seen a wave of closures on AI companies. According to a report by Commercial Times, citing Chinese media TMTPost, nearly 80,000 AI companies in China have registered and then either closed down or suspended operations within the past 600 days.

The reports note that according to the data from the National Enterprise Credit Information Publicity System of China, between November 30, 2022, the release date of ChatGPT, and July 29, 2024, a total of 78,612 AI-related companies in China, which were newly registered during this period, are now in a deregistered or abnormal business status. This accounts for 8.9% of the 878,000 AI companies registered during the same period.

The current adversity for the AI companies in China, the reports suggest, could be attributed to excessive spendings regarding high computational costs and R&D investments, declines in venture capital leading to a funding freeze, and difficulties in achieving profitability.

According to the reports, over the past three years, more than 200,000 AI-related companies in China have been deregistered or revoked, with a total of 353,000 AI-related companies disappearing within the past decade.

On the other hand, as of August 7th, there are said to be 300,700 new AI companies registered in 2024. Currently, there are 1,804,300 AI-related companies in existence in China, the reports state.

Among them, over 4,500 companies are officially recognized as part of the AI industry system. More than 180 large generative AI models, which have completed registration and be online to provide public services, have been developed, with a registered user base exceeding 564 million.

Wang Xiaochuan, founder of Chinese search engine company Sogou, once stated in 2023 that the Large Language Model (LLM) for AI would undergo an “elimination tournament” in China, with the top tier likely consisting of no more than five companies, according to a report on Soho.

Baidu CEO Robin Li also mentioned in July that China has too many large language models, calling for tech leaders to focus more on building real-world applications driven by AI. A report by South China Morning Post, quoting Li, said that since the launch of ChatGPT in late 2022, China’s generative AI market has become crowded with over 200 large language models.

Read more

• [News] China Reportedly Imposes Mandatory AI Model Reviews on ByteDance, Alibaba, and Others

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AI server solution provider Supermicro, at its earnings call last week, revealed that the liquid cooling industry has been facing shortages for critical components, which further hinders its shipments. According to the latest report by the Economic Daily News, sources from the supply chain indicate that the critical component Supermicro referred to is the “quick coupling.”

The report notes that Taiwanese companies, including Global Tek, Fositek and Lotes, are accelerating their pace on sample verification.

Thanks to the soaring demand, the market is seeing a frenzy for quick couplings, with buyers willing to pay premium prices to secure capacity, the report suggests. The report notes that the price of quick couplings has surged from the original USD 40 to USD 60 per unit, with eager buyers claiming to pay for more as long as the components are available.

Citing industry experts, the report explains that the liquid-cooling system in AI servers consists of six key components: cooling distribution units (CDUs), cold plates, cabinets, fan walls, coolant distribution manifolds (CDMs), and quick couplings.

Among these, quick couplings are responsible for connecting the coolant flow between the cold plate and the CDU with great speed. In addition, as they are also prone to leakage, their quality would be especially crucial for liquid-cooling systems to operate smoothly.

The reason for the shortage, the report notes, is primarily due to the fact that a single AI server cabinet requires hundreds of male and female threads for quick couplings. As major cloud service providers (CSPs) are purchasing AI servers in large quantities, the demand for quick couplings has surged drastically, even to hundreds of times of the cabinets themselves.

It is worth noting that currently, the market for liquid-cooling quick couplings in AI servers is dominated by seven companies, including two Chinese firms. However, as the sanctions implemented in the U.S.-China tech war restrict the momentum of the Chinese companies, the market demand could not be satisfy. Also, the patents related to the components have created high barriers for other suppliers to enter the market.

Taiwanese companies, including Global Tek, Fositek and Lotes, therefore, are actively investing in the business and accelerating their sample submission, eyeing for the opportunities to receive order transfers.

Global Tek, for example, is working with partners at its Wuxi plant in China and its Taoyuan plant in Taiwan, with samples being tested. The company anticipates revenue contribution as early as the fourth quarter of this year or early next year.

Fositek, supported by its parent company Asia Vital Components, is currently focused on developing quick couplings and has already submitted samples for customer certification. Lotes, on the other hand, expects to see progress by the end of the third quarter.

Read more

• [News] Supermicro’s Financial Results Reveal Profit Shortfall
• [News] Supermicro President Charles Liang Bullish on Direct Liquid Cooling, Targeting a 15% Market Share within Next Year 

(Photo credit: Supermicro)