Fears develop of giant bubble as AI chip race advances – DW – 02/20/2024 | EUROtoday

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Sam Altman brought on greater than a stir in early February when he known as for a $5 to 7 trillion (€4.65 to six.5 trillion) international funding to produce extra highly effective chips for the following technology of synthetic intelligence (AI) platforms. Many business analysts have been left open-mouthed on the determine cited by the Open AI chief government, which is equal to nearly 1 / 4 of the US federal funds.

Altman desires to unravel a number of the main points confronted by the AI sector, which features a main scarcity of chips and semiconductors wanted to energy massive language fashions like his agency’s ChatGPT, the Wall Street Journal reported earlier this month.

The US entrepreneur has warned that vastly extra highly effective computing might be wanted to assist AI ultimately overtake human intelligence. Altman not too long ago held discussions with potential buyers within the United Arab Emirates, the enterprise every day stated.

Unprecedented funding calls for

“Asking for $7 trillion is just indecent,” Pedro Domingos, professor emeritus of pc science and engineering on the University of Washington, informed DW. “It is an order of magnitude more than the entire chip industry has spent in its history.”

Domingos stated Altman would doubtless accept round $700 billion in backing, which continues to be a far cry from the worth of all the AI chip sector. Canadian-Indian analytics agency Precidence Research not too long ago calculated the business may very well be value some $135 billion by 2030.

Others assume that Altman’s projection won’t be to this point out if the ambition is for AI to ultimately change into smarter than people in each approach.

“Right now, Chat GPT4 is only text,” Dylan Patel, chief analyst at SemiAnalysis, told DW. “But what in case you add photographs, video, audio and motorized tactile suggestions? And what if we assume that AI does outpace people on all fronts? That goes to value lots of of billions and even trillions of {dollars}.”

In the most recent signal of the pace that AI is progressing, OpenAI final week unveiled a platform known as Sora, for creating high-quality brief movies from a easy line of textual content.

OpenAI's CEO Sam Altman, the founder of ChatGPT, speaks at a university event in London, UK, on May 24, 2023
Open AI CEO Sam Altman has known as for a $5-7 trillion funding in superior AI chip manufacturingImage: Alastair Grant/image alliance / ASSOCIATED PRESS

AI chip race heats up

Before Altman’s projection was made public, the world’s main governments — the United States, China, Japan and a number of other European nations — have been already making an attempt to safe or preserve a share of the chip business for themselves.

Over the previous 18 months, Washington has additionally levied sanctions on Beijing to cease Chinese corporations from having access to US-designed chips. But relatively than hobble Beijing’s means to develop superior AI computing energy, Domingos stated the sanctions have been “counterproductive.”

“There are many ways that China can obtain US chips through intermediaries. But those sanctions also encourage China to develop its own capacity and be less reliant on US chips,” the writer of the e book “The Master Algorithm” stated.

Indeed, the US sanctions have emboldened Chinese leaders who’ve pledged to step up their investments in AI chip manufacturing.

China catching up quick

“China is subsidizing AI chips to the tune of $250 billion over the next decade to build a manufacturing supply chain and catch up,” Patel famous. He stated China is at present about 4 to 5 years behind Taiwan, the worldwide chief in chip manufacturing, and two to 3 years behind in semiconductor design — a race at present being gained by US chip corporations.

Other nations might wrestle to enter the AI chip-producing ring, as they do not have enormous tech corporations to commit tens of billions of investments, like Microsoft — which backs Altman’s Open AI and Google, which final 12 months unveiled its personal AI chip.

“If Germany wants to be a leader in AI, they’re going to have to subsidize it because the likes of Mercedes Benz and Daimler are not necessarily going to invest a ton on advanced chips,” stated Patel.

Advanced chips a ‘strategic commodity’

Economic historian Chris Miller, the writer of the e book “Chip War,” informed DW that extra nations have realized that ultra-high-speed chips have change into a “strategic commodity,” amid the present geopolitical standoff between world powers.

He predicted that the US authorities and others “will be quite sensitive about where the chip plants are located and who’s involved in their production” to keep away from autocratic nations like China from utilizing AI for nefarious functions.

People walking towards the entrance to Nvidia Endeavor office building at the Company's corporate HQ in Silicon Valley, California, on August 9, 2019
The world’s largest chip designer NVIDIA has seen its market worth greater than triple in two yearsImage: IMAGO/Pond5 Images/Sundry Photography

NVIDIA leads inventory market soften up

NVIDIA is the market chief in AI chip design. The Santa Clara, California-based agency is now valued at $1.8 trillion, making it the third-largest firm on the US inventory market, trailed by the likes of AMD and Intel.

Amid a inventory market soften up — a interval of speedy market development fueled by investor optimism NVIDIA has seen its worth rise by $296.5 billion in simply the final month, which most analysts assume is unsustainable.

Domingos likened the present investor craze for AI to a “balloon that is inflating very rapidly,” till it bursts.

“A lot of people, companies, countries are going to lose a ton of money. There’s going to be a lot of carnage,” he told DW. “But in the long term, AI will be just like the Internet. Who cares in regards to the dotcom bust as of late? The Internet is a actuality, it is all-pervasive and the idea for the following development in know-how.”

Edited by: Kristie Pladson