The AI boom might be leading to a spike in GPU prices

Chinese tech companies are reportedly racing to obtain powerful graphics processing units (GPUs) which could power artificial intelligence.

We’ve collected analysis and reporting you should read on the rush to stockpile processing chips.

• Top Chinese tech firms, including Baidu, ByteDance, and Alibaba, have ordered $5 billion worth of Nvidia’s chips. They’re reliant on the chips to power artificial intelligence and worry that the Biden administration’s restrictions on advanced semiconductor sales to China could be expanded to encompass the GPUs. One unnamed employee at Baidu said in a recent interview that “Without these Nvidia chips, we can’t pursue the training for any large language model.” — The Financial Times
• This wouldn’t be the first time that GPUs have seen a massive uptick in demand. At the start of the crypto boom, GPUs were stockpiled due to their powerful processing capabilities, and the street price of graphics cards in some cases tripled. As the AI boom marches on, prices are expected to jump again. “If you’re planning a new gaming PC build or upgrade with the best GPUs, you might want to get a purchase in sooner rather than later,” reporter Michael Crider warns. — PCWorld
• There are signs that the market value for GPUs has already skyrocketed. In China, some GPUs are retailing for $70,000 per chip, and cards which would normally be used in home computers are reportedly being snapped up by AI industry players instead. “We can clearly see that the rise of AI is having a profound impact on the supply of compute-focused GPUs,” tech writer Mark Tyson notes. — Tom’s Hardware

Nvidia — which is the largest exporter of chips in the world — announced Tuesday that it had developed a new chip aimed at specifically powering large language models and AI.