China would love a domestic Nvidia rival — but that's proving quite the challenge
Chinese firms face a number of challenges in trying to rival Nvidia including contending with U.S. export restrictions and a lack of tech expertise.
Chinese companies are ramping up efforts to produce a viable alternative to Nvidia's chips that power artificial intelligence as Beijing continues its efforts to wean itself off American technology.
U.S. sanctions slapped on China over the past few years, along with Nvidia's dominance in the space, have provided big challenges for Bejing's efforts, at least in the short term, analysts told CNBC.
Nvidia's well-documented boom has been driven by large cloud computing players buying its server products which contain its graphics processing units, or GPUs. These chips are enabling companies, such as ChatGPT maker OpenAI, to train their huge AI models on massive amounts of data.
These AI models are fundamental to applications like chatbots and other emerging AI applications.
CNBC spoke to analysts who identified some of China's leading contenders that are looking to challenge Nvidia, including technology giants Huawei, Alibaba and Baidu and startups such as Biren Technology and Enflame.
The overarching view is that they are lagging behind Nvidia at this point.
"These companies have made notable progress in developing AI chips tailored to specific applications (ASICs)," Wei Sun, a senior analyst at Counterpoint Research, told CNBC.
"However, competing with Nvidia still presents substantial challenges in technological gaps, especially in general-purpose GPU. Matching Nvidia in short-term is unlikely."
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