Chinese tech giant Baidu has revealed a stockpile of advanced artificial intelligence (AI) chips to navigate the short-term impact of US export restrictions.
Chinese tech giant Baidu has revealed a stockpile of advanced artificial intelligence (AI) chips to navigate the short-term impact of US export restrictions.
Despite acknowledging potential challenges due to US sanctions on exports of advanced AI chips to China, Baidu’s CEO, Robin Li Yanhong, expressed confidence in the company’s ability to continue AI development. Baidu anticipates having sufficient AI chips to support its Ernie large language model (LLM) for the next two years, particularly as it competes with OpenAI’s ChatGPT.
Robin Li Yanhong stated during an earnings call on Tuesday that the restrictions on chip exports to China would have limited impact on Baidu in the near term.
He emphasized the adequacy of Baidu’s chip reserves and alternative sources to support AI applications for end users. While Li did not provide specifics on alternative chip sources, he highlighted Baidu’s unique AI architecture and algorithmic strengths, which, he believes, will help mitigate challenges and enhance efficiency.
However, Li acknowledged that US sanctions on advanced AI chip exports to China, involving key companies like Nvidia, could impact the overall pace of AI development in the country. He suggested that this situation might lead to a consolidation of Chinese AI companies around leading LLMs. Despite potential hurdles, Baidu remains focused on its Ernie Bot ecosystem, which has garnered significant attention and user adoption.
Baidu’s Ernie Bot, introduced earlier this year, competes with OpenAI’s ChatGPT and has accumulated 70 million users within three months of its public launch. Li highlighted that Ernie Bot is handling tens of millions of queries daily, and thousands of enterprises have adopted Baidu’s AI services. The generative AI products, including Ernie Bot, are expected to contribute to additional ad revenue for Baidu in the fourth quarter.
The company reported revenue of 34.45 billion yuan (approximately US$4.7 billion) for the September quarter, reflecting a 6% increase from the previous year. While AI cloud revenue declined 2% year-on-year in the last quarter, Baidu anticipates sustained multi-year revenue and profit expansion within its Ernie and Ernie Bot ecosystem.
In response to US AI chip curbs, Baidu is reported to have placed an order for domestically-made AI chips from Chinese telecommunications giant Huawei Technologies, potentially serving as an alternative to Nvidia. The increasing challenges due to US export restrictions on advanced technologies have prompted Chinese tech companies like Baidu, Alibaba, and Tencent to explore alternative sources and navigate potential disruptions to their operations.
Baidu’s strategic focus on AI growth opportunities aligns with its commitment to prioritize investments in AI, especially in generative AI and foundation models. The company aims to realign resources to support its AI-centric business and product strategy, emphasizing sustained growth and expansion.
Despite economic uncertainties in China, Baidu’s resilient approach to AI development, coupled with its chip reserves, positions the company to navigate challenges and capitalize on the growing demand for advanced AI applications and services. The evolving landscape of AI development in China will likely see continued efforts to secure alternative chip sources and strengthen domestic capabilities in the face of external constraints.