China’s hi-tech push for computing power, AI gains face big hurdles: analysts
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China's push for computing power and AI gains faces challenges due to a lack of critical supplies for AI development, fragmented market, and difficulties in developing indigenous computing power. The growth rate of China's public computing investment declined from 66.55% in 2019 to 13.2% in the first half of 2023. Data centers backed by private companies and local governments saw an increase from 5.3% in 2020 to 20.7% in 2023. Beijing aims to raise China's share of AI computing power to 35% by the end of next year. Only 38% of the capacity of data centers was used in 2022, far below the global level of 60%. Disorderly competition and uncoordinated local investment may be compromising China's catch-up efforts. Washington's restrictions on high-performance chips have further highlighted the need for China to develop an indigenous computing power system. Analysts call for joint actions from China's leading tech firms to form a domestic industrial ecosystem.
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