Intel to launch weaker AI chips for China to comply with U.S. sanction

Intel will release two AI chips with weaker power for the Chinese market, to comply with U.S. export controls and sanctions.

The two chips, HL-328 and HL-388, are scheduled for launch in June and September, respectively, according to a white paper on the company's website dated April 12.

Rival Nvidia also has plans for three China-specific chips after the U.S. late last year tightened a rule capping the capabilities of AI chips that can be shipped to China.

One of Nvidia's China-specific chips, the H20, is set to be delivered in small batches in the first quarter of 2024, with larger quantities expected from the second quarter.

Intel's China-specific chips are based on the company's latest Gaudi 3 product line, which was unveiled on April 9, with similar hardware features including on-chip memory, high-bandwidth memory and interface standards.

However, to comply with the export control regulations, the performance of the chips will be significantly reduced.

"If a company doesn't sell its most advanced products to foreign customers unreasonably, it's definitely going to lose them," said Zeng Yi, a professor of AI at the Institute of Automation of the Chinese Academy of Sciences. "And once those customers are gone, they probably won't come back, even if the policies change."

"In this case, China has to build alternative AI ecosystems as soon as possible," he added.

Intel is faced with challenges, including its manufacturing technology lagging behind competitors and pressure from rivals like AMD and Nvidia.

The company's performance in the Chinese mainland is important as the region accounted for 27 percent of Intel's revenue in 2023, the largest among all areas.

(Cover via CFP. With input from Reuters. Zhao Chenchen contributed to the story.)