With AI giants in the Western world, such as OpenAI, Google and Meta, stealing the spotlight by their development of generative AI, some big names in China have introduced their AI models over the past 18 months, according to a latest report by CNBC.

Though trying to keep a low profile, five tech conglomerates in China, including Alibaba, Baidu, ByteDance, Huawei and Tencent, have launched their AI models lately, adding a new dimension to the competitive landscape of the ongoing tech rivalry between China and the U.S. Here is a brief introduction of the major Chinese AI models developed by the country’s leading tech firms, based on the information compiled by CNBC and other media reports.

Alibaba: Tongyi Qianwen

In November, 2023, a report by pandaily notes that Alibaba Cloud released its AI model, Tongyi Qianwen 1.0 a few months ago, while the 2.0 version was introduced later in the same year. Another report by South China Morning Post states that as of May, Alibaba reports that its Tongyi Qianwen AI models, often referred to as Qwen, are utilized by more than 90,000 corporate clients across China.

CNBC notes that in terms of Qwen, the company has developed various versions tailored to different functions. For instance, one model specializes in generating content or solving math problems, while another handles audio inputs and provides text-based responses.

It is worth noting that as some Qwen models are open-sourced, developers are allowed to download and use them under certain restrictions, according to CNBC.

Baidu: ERNIE

As one of China’s leading internet companies, Baidu was among the first to introduce generative AI applications in the country. A report by The Verge notes that the Ernie chatbot was available for download in August, 2023, after the approval by the Chinese government.

CNBC reports that Baidu intends to compete with OpenAI’s ChatGPT with Ernie Bot, as the company claims the bot to have 300 million users.

According to CNBC, ahead of the launch of its “Turbo” version, which took place in late June, Baidu stated that its Ernie 4.0 offers capabilities comparable to OpenAI’s GPT-4. According to Baidu, this foundational model has advanced understanding and reasoning abilities.

Similar to other companies, Baidu is offering access to its AI model through its cloud computing services, CNBC says.

ByteDance: Doubao

TikTok parent company ByteDance, though entered the AI race later than competitors like Baidu and Alibaba, has surprised the market with its low-cost Doubao model, which was launched in May, 2024.

According to a report by technode, the model can process 2 million Chinese characters, equivalent to 1.25 million tokens, for just RMB 1 (USD 0.14). In comparison, OpenAI’s latest multimodal model, GPT-4o, costs USD 5 per million input tokens.

CNBC notes that Doubao has various capabilities, including voice generation and coding support for developers.

Huawei: Pangu

Introduced by Huawei in 2021 as the world’s largest pre-trained Chinese large language models (LLMs) with over 100 billion parameters, the Pangu models are now entering their fourth iteration, according to Counterpoint. In May, 2024, the latest Pangu models are said to boast 230 billion parameters.

Interesting enough, Huawei has adopted a different strategy from its competitors with its Pangu AI models, CNBC remarks. The tech giant focuses on developing industry-specific models tailored to sectors like government, finance, manufacturing, mining, and meteorology.

For instance, Huawei claims that its Pangu Meteorology Model can predict a typhoon’s trajectory 10 days in advance in just 10 seconds, a task that previously took four to five hours, according to CNBC.

Tencent: Hunyuan

Last year, Tencent introduced its foundational model, Hunyuan, which is accessible through Tencent’s cloud computing services.

According to CNBC, Tencent has highlighted Hunyuan’s strong Chinese language processing abilities and advanced logical reasoning, supporting features like image generation and text recognition. The model is designed for use across industries such as gaming, social media, and e-commerce.

As the operator of China’s largest messaging app, WeChat, Tencent launched an AI chatbot this year based on the Hunyuan model. The AI assistant, named Yuanbao, can access information and content from WeChat, setting it apart from competitors, CNBC notes.

Notably, China’s large language models, just like its rivals in the West, rely on the strong computing power of AI chips. A previous report by Reuters in November, 2023, states that Tencent is said to have stockpiled a substantial reserve of AI chips from NVIDIA, as the company prepares in advance to train its Hunyuan AI models for the following generations.

How far will the tech giants in China be able to push the boundaries of AI models? The answer may lie in the development of the country’s domestic chips, as the U.S. authority already banned the export to China of AI chips.

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(Photo credit: Baidu)

Due to challenges in exporting high-performance processors based on x86 and Arm architectures to China, the country is gradually adopting domestically designed operating systems.

According to industry sources cited by Tom’s hardware, Tencent Cloud recently launched the TencentOS Server V3 operating system, which supports China’s three major processors: Huawei’s Kunpeng CPUs based on Arm, Sugon’s Hygon CPUs based on x86, and Phytium’s FeiTeng CPUs based on Arm.

The operating system optimizes CPU usage, power consumption, and memory usage. To optimize the operating system and domestic processors for data centers, Tencent has collaborated with Huawei and Sugon to develop a high-performance domestic database platform.

Reportedly, TencentOS Server V3 can run GPU clusters, aiding Tencent’s AI operations. The latest version of the operating system fully supports NVIDIA GPU virtualization, enhancing processor utilization for resource-intensive services such as Optical Character Recognition (OCR). This innovative approach reduces the cost of purchasing NVIDIA products by nearly 60%.

TencentOS Server is already running on nearly 10 million machines, making it one of the most widely deployed Linux operating systems in China. Other companies, such as Huawei, have also developed their own operating systems, like OpenEuler.

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• [News] Hurdles in Acquiring NVIDIA’s High-End Products: Assessing the Progress of Eight Chinese AI Chip Companies in Self-Development

(Photo credit: Tencent Cloud)

In order to comply with new regulations on the export of chips to the United States, NVIDIA has been consistently releasing AI chips and graphics cards tailored for the Chinese market.

However, according to sources cited by The Wall Street Journal, since November 2023, major cloud service provider (CSP) in China such as Alibaba and Tencent have been testing samples of NVIDIA’s special chips. These Chinese enterprises have conveyed to NVIDIA that the quantity of chips they plan to order in 2024 will be significantly lower than their initial plans.

According to a report from The Wall Street Journal, in October 2023, the United States announced new regulations preventing NVIDIA from selling advanced AI chips to China. However, NVIDIA swiftly developed a “special edition” chip for China, allowing them to continue selling chips in the Chinese market without violating regulations.

Nevertheless, NVIDIA is facing another challenge: major Chinese CSPs are not actively purchasing the “downgraded” performance versions of the chips.

Chinese enterprises have been testing the highest-performance version, H20, of NVIDIA’s “special edition” AI chips. Some testers have mentioned that this chip enables efficient data transfer among multiple processors, making it a better choice than domestic alternatives for building chip clusters required for processing AI computational workloads.

However, testers also indicate that they need more H20 to compensate for the performance gap compared to previous NVIDIA chips, which increases their costs.

The report indicates that in the short term, the performance advantage of NVIDIA’s “downgraded” chips over domestic Chinese products is diminishing, making Chinese-made chips increasingly attractive to buyers.

Informed sources cited from the report suggest that major players like Alibaba and Tencent are redirecting some advanced semiconductor orders to domestic companies and relying more on internally developed chips. This trend is also observed with the other two major chip buyers, Baidu and ByteDance.

Looking ahead in the long term, Chinese customers are uncertain about NVIDIA’s ability to continue supplying them with chips, as U.S. regulatory authorities have committed to regularly reviewing chip export controls, potentially tightening restrictions on chip performance further.

From the perspective of China’s efforts in the independent development of AI chips, TrendForce previously highlighted in its press release that Chinese CSPs like Baidu and Alibaba are actively investing in autonomous AI chip development.

Baidu developed its first self-researched ASIC AI chip, Kunlunxin, in early 2020, with its second generation scheduled for mass production in 2021 and the third expected to launch in 2024. Post-2023, Baidu aimed to use Huawei’s Ascend 910B acceleration chips and expand the use of Kunlunxin chips for its AI infrastructure.

After Alibaba’s acquisition of CPU IP supplier Zhongtian Micro Systems in April 2018 and the establishment of T-Head Semiconductor in September of the same year, the company began developing its own ASIC AI chips, including the Hanguang 800.

TrendForce reports that T-Head’s initial ASIC chips were co-designed with external companies like GUC. However, after 2023, Alibaba is expected to increasingly leverage its internal resources to enhance the independent design capabilities of its next-gen ASIC chips, primarily for Alibaba Cloud’s AI infrastructure.

According to the data from TrendForce, currently, around 80% of the high-end AI chips used by Chinese cloud computing companies are sourced from NVIDIA. However, in the next five years, this proportion may decrease to 50% to 60%.

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• China Continues to Enhance AI Chip Self-Sufficiency, but High-End AI Chip Development Remains Constrained, Says TrendForce

(Photo credit: NVIDIA)

On October 17th, the U.S. Department of Commerce announced an expansion of export control, tightening further restrictions. In addition to the previously restricted products like NVIDIA A100, H100, and AMD MI200 series, the updated measures now include a broader range, encompassing NVIDA A800, H800, L40S, L40, L42, AMD MI300 series, Intel Gaudi 2/3, and more, hindering their import into China. This move is expected to hasten the adoption of domestically developed chips by Chinese communications service providers (CSPs).

TrendForce’s Insights:

1. Chinese CSPs Strategically Invest in Both In-House Chip Development and Related Companies

In terms of the in-house chip development strategy of Chinese CSPs, Baidu announced the completion of tape out for the first generation Kunlun Chip in 2019, utilizing the XPU. It entered mass production in early 2020, with the second generation in production by 2021, boasting a 2-3 times performance improvement. The third generation is expected to be released in 2024. Aside from independent R&D, Baidu has invested in related companies like Nebula-Matrix, Phytium, Smartnvy, and. In March 2021, Baidu also established Kunlunxin through the split of its AI chip business.

Alibaba, in April 2018, fully acquired Chinese CPU IP supplier C-Sky and established T-head semiconductor in September of the same year. Their first self-developed chip, Hanguang 800, was launched in September 2020. Alibaba also invested in Chinese memory giant CXMT, AI IC design companies Vastaitech, Cambricon and others.

Tencent initially adopted an investment strategy, investing in Chinese AI chip company Enflame Tech in 2018. In 2020, it established Tencent Cloud and Smart Industries Group(CSIG), focusing on IC design and R&D. In November 2021, Tencent introduced AI inference chip Zixiao, utilizing 2.5D packaging for image and video processing, natural language processing, and search recommendation.

Huawei’s Hisilicon unveiled Ascend 910 in August 2019, accompanied by the AI open-source computing framework MindSpore. However, due to being included in the U.S. entity list, Ascend 910 faced production restrictions. In August 2023, iFLYTEK, a Chinese tech company, jointly introduced the “StarDesk AI Workstation” with Huawei, featuring the new AI chip Ascend 910B. This is likely manufactured using SMIC’s N+2 process, signifying Huawei’s return to self-developed AI chips.

2. Some Chinese Companies Turn to Purchasing Huawei’s Ascend 910B, Yet It Lags Behind A800

Huawei’s AI chips are not solely for internal use but are also sold to other Chinese companies. Baidu reportedly ordered 1,600 Ascend 910B chips from Huawei in August, valued at approximately 450 million RMB, to be used in 200 Baidu data center servers. The delivery is expected to be completed by the end of 2023, with over 60% of orders delivered as of October. This indicates Huawei’s capability to sell AI chips to other Chinese companies.

Huawei’s Ascend 910B, expected to be released in the second half of 2024, boasts hardware figures comparable to NVIDIA A800. According to tests conducted by Chinese companies, its performance is around 80% of A800. However, in terms of software ecosystem, Huawei still faces a significant gap compared to NVIDIA.

Overall, using Ascend 910B for AI training may be less efficient than A800. Yet with the tightening U.S. policies, Chinese companies are compelled to turn to Ascend 910B. As user adoption increases, Huawei’s ecosystem is expected to improve gradually, leading more Chinese companies to adopt its AI chips. Nevertheless, this will be a protracted process.

The United States has elevated its efforts to curtail the advancement of high-end chips in China. As reported by the CLS News, various companies within China have indicated they received advance notifications and have already amassed chip stockpiles. Analysts suggest that this new wave of bans implies a further restriction by the U.S. on China’s computational capabilities, making the development of domestically-manufactured GPUs in China a matter of utmost importance.

According to the latest regulations, chips, including Nvidia’s A800 and H800, will be impacted by the export ban to China. An insider from a Chinese server company revealed they received the ban notice at the beginning of October and have already stockpiled a sufficient quantity. Nevertheless, they anticipate substantial pressure in the near future. The procurement manager for a downstream customer of Inspur noted that they had proactively shared this information and urged potential buyers to act promptly if they require related products.

Larger companies like Tencent and Baidu are less affected by the ban due to their ample stockpiles. On October 17th, HiRain Technologies announced that its subsidiary had purchased 75 units of H800 and 22 units of A800 from supplier A and had resolved this issue two weeks ago.

(Image: NVIDIA)