Tencent’s president Martin Lau says company has a “pretty strong stockpile of chips.”
Last month, Nvidia said the Trump administration imposed new chip export restrictions to China.
Lau said Tencent has enough chips to train its AI models “for a few more generations going forward.”
The Chinese tech giant Tencent said it has a “pretty strong stockpile of chips” to tide it through America’s chip sale restrictions.
The company’s president, Martin Lau, was speaking to investors during an earnings call on Wednesday when he was asked how Tencent would deal with US chip restrictions.
Lau said “it’s a very dynamic situation” that Tencent is managing, and it’s trying to “figure out the right solution” to make sure its AI strategy “can still be executed.”
Lau told investors that Tencent can rely on a “pretty strong stockpile of chips that we acquired previously.” Lau said the chips will be deployed to projects that can “generate immediate returns for us,” such as in Tencent’s advertising business.
When it comes to training Tencent’s large language models, Lau said the company will not need a large number of chips to improve its performance. This is because companies are starting to move away from the scaling law “which required continuous expansion of the training cluster,” Lau said.
“And now we can see even with a smaller cluster, you can actually achieve very good training results. And there’s a lot of potential that we can get on the post-training side which do not necessarily meet very large clusters,” Lau said.
“So that actually helps us to look at our existing inventory of high-end chips and say we should have enough high-end chips to continue our training of models for a few more generations going forward,” Lau added.
Last month, Nvidia told investors in a regulatory filing that the Trump administration will be imposing new export licensing restrictions for chips being sold to China and other countries.
The chip giant said it would incur a charge of up to $5.5 billion in inventory, purchase commitments, and reserves for its H20 chip in the first quarter, which ended on April 27. Nvidia designed the H20 chip based on the Biden administration’s chip export restrictions.
Analysts, however, have said the Trump administration’s new restrictions will not slow down China’s progress in AI.
“Banning the H20 would make no sense as its performance is already well below Chinese alternatives; a ban would simply hand the Chinese AI market completely over to Huawei,” Bernstein analysts wrote in a note to investors on April 23.
Tencent did not respond to a request for comment from Business Insider.
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