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- Exploring New Chinese GPUs and DeepSeek R1: What it Means for NVIDIA
Exploring New Chinese GPUs and DeepSeek R1: What it Means for NVIDIA
Discover the impact of the Chinese DeepSeek R1 model on the GPU market and the emergence of new Chinese GPUs. Learn why this presents a significant opportunity and what it means for NVIDIA as competition evolves.
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Video Transcript
the release of the Chinese DeepSeek R1 model
caused a really big splash on the stock market
and this week the discussions around it continued
meanwhile new models and new Chinese GPUs made
headlines so in this video I want to focus on
the impact of all of this on the GPU market
and why it's in fact a huge opportunity which may
not happen again I will also break down some new
very interesting Chinese GPUs that are on the way
right now so if you want to know where the market
is shifting watch till end in December 2024 the
Chinese AI company DeepSeek released their V3
based model which was extremely efficient but no
one paid any attention to it at the end of January
they released the Reasoning Model R1 which they
claimed achieved comparable performance to Open's
AI 01 and this release just exploded and the first
reason was due to its Hardware training costs what
many people concluded is that the best NVIDIA GPUs
may not be needed to make big strides in AI and I
think it's very important to discuss what's going
on here first of all High-Flyer is a hedge fund
that also founded DeepSeek and High-Flyer used
to be one of the biggest NVIDIA customers in
the Chinese market purchasing tens of thousands of
A100 and H100 GPUs so no way they are a threat to
NVIDIA but still this $6 million figure training
cost made all the headlines because it's very low
compared to Open's AI estimated 100 million for
a similar model and then we all witnessed how the
media as always messed up the whole story if we
now look at the bigger picture DeepSeek reportedly
has access to roughly 50,000 GPUs among them are
older A100 GPUs but mostly different adaptations
of H100 Hopper GPU for the Chinese market among
them are H800 and H20 versions what's interesting
if we look at the specs H800 GPU almost matches
the peak performance of H100 GPU you in the most
performance metrics biggest difference is in
the memory and NVLink bandwidth in practice
this means slower data movement between memory
and the processing cores as well as in between
GPUs as discussed before by now H800 is also
not allowed and only H20 is allowed and this
is quite funny because H20 is in fact preferable
because it has more memory and in 2024 NVIDIA sold
roughly 1 million H20 GPUs to China and the next
NVIDIA GPU to come to the Chinese market was B20
which is a derivative of B200 Blackwell GPU but
the exact specs are yet unknown when I saw NVIDIA
stock dropping I was like shopping time because
long term I think this DeepSeek drama will only
increase the evaluation of NVIDIA straighten
expert controls and it will all come to the
fact that Chinese companies will have to move to
the domestic options which are getting better and
better and now we are at the most interesting
part let's discuss which options do they have
and what is yet to come in fact DeepSeek
are one reduced requirements on the compute
side open the door to many domestic hardware
and yes before the restrictions took effect
NVIDIA share on the Chinese market was roughly
90% but over the last few years Chinese companies
have been working on getting a share of this
pie including companies like Huawei Alibaba
Moore Threads Biren Tencent Enflame Hygon and
many more among them the most interesting story
is Huawei their Ascend 910b GPU is the most
powerful GPU which is designed and manufactured
in China and it's in a very high demand now
if you look at the official specs its peak
performance at 8bit precision is 512 TeraFLOPs so
theoretically it has higher FLOPs than NVIDIA H20
GPU and now Huawei is ramping up its R1 model
on Huawei Cloud which is partially built out of
Ascend 910b GPUs Huawei is challenging Nvidia
with a new chip for Artificial Intelligence
according to the Wall Street Journal Huawei has
reportedly told potential clients that the chip
is comparable to NVIDIA's H100 at the same time
the new Ascend 910c GPU is in development they've
already manufactured the first samples and plan to
ramp up mass production already this year if you
previously watched this video you know that SMIC
or SMIC Chinese semiconductor manufacturing giant
is currently struggling with a yield in N+3
process which is roughly at 20% now and this
number is far off from what is typically
required to bring a product such as this
GPU to mass production if you want to know more
details on this subscribe to the channel now and
watch this video right after this one now talking
of 910c GPU is manufactured in N+3 process node
by SMIC which is equivalent to 6nm process by
TSMC or N6 and it's rumored to be a doubled
die design means doubling the same silicon of 910b
GPU and this is very interesting for many reasons
first of all because it's following the general
industry trend of building larger GPUs because
