China offers computing vouchers to support AI startups in competing with tech giants.

China is reportedly taking steps to support its AI startups ecosystem and help them compete with tech giants. At least 17 cities in China are offering ‘computing vouchers’ worth between $140,000 and $280,000 to AI startups to help cover the rising costs of data centers, which have been exacerbated by a shortage of chips vital to the AI sector. These vouchers can be used for training and running large language models in AI data centers.

This move comes in response to internet companies with cloud computing services cancelling contracts and ‘hogging’ graphics processing units (GPUs) due to stricter measures in the United States. As a result, tech giants have restricted GPU rentals and reserved most AI processors for in-house use and key clients.

The scarcity of expensive AI chips has posed a challenge for companies, leading them to either stockpile chips, repurpose Nvidia’s gaming chips, or resort to the black market. Nvidia currently holds over 80% global market share in the chip market.

However, China’s AI regulation is playing a pivotal role in overseeing the industry. As the world’s largest producer of AI research, China’s oversight provides valuable context and technical feasibility for different regulatory approaches. This regulatory framework, coupled with the provision of computing vouchers to AI startups, demonstrates China’s commitment to nurturing the AI sector and competing globally with tech giants.