Analysis of AI Chip Market and Development Trends: Largest Single Funding Round for Domestic AI Chips Emerges in Shanghai's Pudong

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AI chips, as a vital part of the foundational layer in artificial intelligence, currently exhibit relatively weak technological capabilities in China, offering significant potential for industry expansion and advancement. With the intelligent development of the socio-economy and continuous improvements in AI technology, the application areas of AI chips are expanding. Coupled with the widespread adoption of 5G and policy support, the market demand for AI chips in China is growing rapidly, with the market size surging at an accelerated pace.

Ming-Chi Kuo: AMD's AI Chip Shipments Expected to Grow Rapidly in 2024-25

Recently, renowned Apple analyst Ming-Chi Kuo stated:

1. The latest survey indicates that AMD's 2024 AI chip shipments (primarily MI300A) will be approximately 10% of Nvidia's (using CoWoS process technology).
2. Microsoft is AMD's largest AI chip customer in 2024 (accounting for over 50% of shipments), followed by Amazon. Meta and Google are testing AMD's AI chips, with Meta likely to become AMD's next CSP customer.
3. AMD's AI chips are primarily sold to CSPs (Cloud Service Providers) due to their stronger software capabilities, which compensate for AMD's software weaknesses.
4. In 2025, AMD's main AI chip customers are expected to remain CSPs. If Microsoft's collaboration with AMD proceeds smoothly and AMD secures orders from Meta and Google, AMD's AI chip shipments could reach approximately 30% or more of Nvidia's (using CoWoS process technology).

Analysis of AI Chip Market and Development Trends

In recent years, as awareness of the importance of AI chips for computing power has grown, the number of players in the AI chip sector has increased significantly.

Artificial intelligence and integrated circuits are driving forces behind the new wave of technological revolution and industrial transformation, serving as foundational industries that support socio-economic development and overall productivity advancement.

The AI industry chain can be divided into three layers: the foundational layer, the technical layer, and the application layer. The foundational layer, as the basis for AI industry development, provides data and computing power support, with AI chips being the cornerstone of AI computing power. As a critical part of the foundational layer, AI chips in China currently face relatively weak technological capabilities, offering vast potential for industry growth. With the intelligent development of the socio-economy and continuous improvements in AI technology, the application areas of AI chips are expanding. Coupled with the widespread adoption of 5G and policy support, the market demand for AI chips in China is growing rapidly, with the market size surging at an accelerated pace. Moreover, as the scope of AI applications in China continues to expand, the demand for AI chips will rise significantly.

2023 Sees Largest Single Funding Round for Domestic AI Chips in Shanghai's Pudong

Recently, Enflame Technology, a company specializing in AI cloud computing products, announced the completion of its Series D funding round, raising RMB 2 billion, marking the largest single funding round in the domestic AI chip sector this year. Behind this funding, the "Pudong factor" shines brightly in the tech landscape.

Enflame Technology is a tech company born and raised in Shanghai's Pudong New Area, representing Shanghai's efforts to achieve high-level technological self-reliance. In this funding round, it received investment from Pudong Investment Holding Group. More importantly, through the guidance of the Pudong Leading Zone Industrial Development Fund, the Yangtze River Delta Collaborative Leading Fund—a subsidiary guiding fund—leveraged multiple stakeholders to co-lead the investment in Enflame Technology, collaborating with several market-driven investment institutions to contribute to the construction of China's intelligent computing infrastructure.

This exemplifies how the Pudong Leading Zone Industrial Development Fund plays a "leading" role, using the capital chain to enhance the innovation chain and driving the industrial chain through innovation.

AI chips, also known as AI accelerators or computing cards, are modules specifically designed to handle large-scale computational tasks in AI applications (non-computational tasks remain the responsibility of CPUs). Currently, AI chips are mainly categorized into GPUs, FPGAs, and ASICs.

Much of AI's data processing involves matrix multiplication and addition. GPUs, which work in parallel, offer a cost-effective solution but consume more power. FPGAs with built-in DSP modules and local memory are more energy-efficient but typically more expensive.

In terms of technical approaches, the first AI chips in the market included various combinations of off-the-shelf CPUs, GPUs, FPGAs, and DSPs. While new designs are being developed by companies like Intel, Google, Nvidia, Qualcomm, and IBM, at least one CPU is required to control these systems. However, when streaming data is parallelized, various types of coprocessors become necessary.

China's AI chip industry started relatively late and still lags behind international advanced levels, which has become a major constraint on the development of the country's artificial intelligence sector. As the role of artificial intelligence in future societal development becomes increasingly prominent, the state has gradually elevated the development of the AI industry to a national strategic level. The research, development, and technological upgrades of AI chips have also garnered significant attention and emphasis from the government. In China's "14th Five-Year Plan and the Long-Range Objectives Through 2035," it is explicitly stated that efforts will be made to strengthen the innovative application of key digital technologies, focusing on critical areas such as high-end chips and key AI algorithms. The plan also emphasizes accelerating breakthroughs and iterative applications in fundamental theories, basic algorithms, equipment, and materials, while fostering the growth of emerging digital industries like artificial intelligence.