Research by the IDC indicates that the growing use of AI technology will require storage capacity in data centers to reach 21.0 zettabytes by 2027. More storage necessitates more energy, and, as a result, data centers are trying to manage growing customer workloads while pre-empting future technological advancements that will further increase infrastructure requirements.

Source: Bulk Data Centers

In addition, climate change will continue to impact businesses and communities worldwide, partly due to rising energy demands. Therefore, it is imperative that the environmental impact of the AI surge is addressed, for example, by implementing state-of-the-art cooling technology and optimizing data center site locations.

Bulk Data Centers, a builder and operator of Nordic data centers, is an example of a company taking steps to address growing energy demands sustainably. TechHQ spoke with Rob Elder, the company’s Chief Commercial Officer (CCO), to find out more about the innovative strategies and technologies implemented to achieve this goal.

Increasing rack density over horizontal expansion

In mid-2023, Bulk Data Centers invested heavily in USystems’ CL20 Active Rear Door Heat Exchangers to support new, power-dense technologies needed to meet customer demands. These include GPU-based hardware, which requires up to 50 kW of power per rack.

Mr Elder told TechHQ: “Customers were asking for density that was beyond the capabilities of traditional systems, plus they wanted more flexibility to ramp up density when needed. This was driven by the ever-growing power of the GPUs and CPUs that customers use.”

Increasing the rack density is a more environmentally friendly way of accommodating larger workloads than horizontal expansion because cooling tends to be more efficient at higher temperatures.

Source: Bulk Data Centers

Mr Elder said: “Some operators try to spread out high-density workloads because they don’t have the cooling systems to accommodate it, but the problem with that is you use more materials to distribute pipework and cables over a longer distance. You also need more real estate because you need a bigger building.

“So actually, by increasing the density, you benefit from smaller buildings, and you densify the infrastructure. All of that further reduces the impact of operations.”

Choosing a site to lower cooling requirements

Bulk Data Centers puts a particular focus on sustainability when selecting sites for expansion. Its facilities are in the Nordics, which benefit from year-round low temperatures and provide natural cooling to racks. “You can increase the number of hours that you’re not running mechanical cooling, which reduces the reliance on electricity,” said Mr Elder.

Electricity in these countries carries a smaller environmental footprint compared to others due to their abundant renewable energy resources. For instance, in Norway, where Bulk has several data center facilities, electricity is sourced from renewable energy.

Mr Elder added: “We’re also assessing supply chain components for environmental impact via procurement, including equipment suppliers and using materials like green steel in construction.”

Employing energy-efficient rear door coolers

While Norway is a naturally cool place, it is not enough to rely entirely on direct air cooling, and Mr Elder said that Bulk Data Centers has “always recognized the limitations of conventional cooling.

USystems’ CL20 Active Rear Door Heat Exchanger units reclaim 15 percent of computing power compared to traditional cooling and save over 50,000 trees-worth of carbon per 1 MW deployment. With adaptive intelligence controlling Bulk Data Centers’ room temperatures, the system minimized risks associated with high-density computing and provided predictable air management. Therefore, it aligned seamlessly with Norway’s energy-efficient ethos and low-carbon hydro energy at Bulk’s N01 campus in Kristiansand, Southern Norway.

“We could offer a peak density beyond what the average was because each door has its own capacity, capturing energy directly from the back of each rack,” said Mr Elder. “Our first deployment with a customer gave an average of 40 kW of rack, but a peak of up to 60 kW.”

Source: Bulk Data Centers

Boosting the peak density allowed Bulk Data Centers to be more flexible in accommodating customers’ power demands. “Having a standard design when we don’t know exactly what our customers are going to be deploying means we’ve got that flexibility and can still meet that short timeframe they require,” he said. “That’s why we’ve continued to develop our relationship with USystems because flexibility and speed are important to customers.”

What’s next for data center operators?

Looking to the future, the CCO emphasized how important it is for data center operators to stay on their toes when it comes to adaptation and innovation. “We’re at the beginning of what seems to be a dramatic shift.”

“Designs will keep evolving, reaching for higher density and necessitating a blend of water-cooled, direct-to-chip, and air-cooled systems.”

Despite growth, the environmental impact must also be considered. “With the massive IT loads that we’re witnessing and the escalating power demands, there’s a growing need for awareness regarding environmental impact.”

As power demands rise and environmental considerations become increasingly crucial, Legrand’s solutions stand ready to future-proof data center infrastructure while minimizing its carbon footprint. Discover how the customizable solutions, endorsed by industry leaders and equipped with adaptive intelligence, could revolutionize your operations by visiting the Legrand website today.

The post How Bulk Data Centers is keeping its cool with soaring AI data demands appeared first on TechHQ.

• An ExxonMobil lawsuit against activist investors was filed in January.
• Activist investors not acting in the interests of shareholders?
• Everyone in the industry is watching closely – keen for a way to make climate activists shut up?

Facing dozens of lawsuits that claim it lied for decades about its role in climate change and the dangers of burning fossil fuels, ExxonMobil has gone on the offensive. Sure, it could reflect on its climate impact, but the company feels its time and resources are better spent on a lawsuit targeting investors who want the company to slash its pollution.

As the world burns, ExxonMobil might as well dive into the flames headfirst, go down swinging and all that.

To try to shape corporate policies in publicly-traded companies, investors can file shareholder proposals that are voted on at annual meetings. ExxonMobil says a pair of investor groups are abusing the system by filing similar proposals year after year in an effort to micromanage its business.

At a time when global temperatures are rising and corporate analysts say most companies aren’t on track to meet their emissions targets, there are growing tensions between companies and investors. Pesky activists calling for corporations to cut climate impact!

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“Exxon is really upping the ante here in a big way by bringing this case,” says Josh Zinner, chief executive of an investor coalition called the Interfaith Center on Corporate Responsibility, whose members include a defendant in the ExxonMobil case. “Other companies could use this tactic not just to block resolutions,” Zinner says, “but to intimidate their shareholders from even bringing these [climate] issues to the table.”

There’s potential for other companies to unleash litigation against climate activists – who aren’t getting enough heat already, right?

ExxonMobil said it’s suing Arjuna Capital and Follow This because the US Securities and Exchange Commission (SEC) isn’t enforcing rules that dictate when investors can resubmit shareholder proposals.

Apparently, the case “is not about climate change,” and court is “the right place to get clarity on SEC rules,” according to ExxonMobil.

The shareholder proposal from Arjuna and Follow This called for ExxonMobil to cut emissions faster from its own operations and from its supply chain. That includes pollution created when customers burn its oil and natural gas. This is known as Scope 3 emissions and accounts for 90% of ExxonMobil’s carbon footprint.

The proposal that Arjuna and Follow This put forward is similar to others that the groups submitted in recent years. ExxonMobil says historically the motions received little support from other shareholders.

All eyes are on the case. “If companies are decreasingly able to get the SEC to allow them to exclude proposals that are obviously politically motivated, then the next question is, well, can the courts succeed where the SEC has failed — or, more accurately, not even tried?” commented Charles Crain – vice president of the National Association of Manufacturers, which represents ExxonMobil and other industrial companies.

After they were sued in federal court in Texas in January, Arjuna and Follow This withdrew the proposal and promised not to submit it to the company again, but ExxonMobil refuses to drop the case.

Follow This founder Mark Van Baal said the ExxonMobil lawsuit is trying to stifle shareholders.

“Apparently, Exxon does not want shareholders to vote on whether the company should accelerate its efforts to reduce emissions,” van Baal said. “This is the concern of more and more investors who want [to] safeguard the long-term future of the company and the global economy in view of the climate crisis.”

The threat of complete climate disaster is putting pressure on companies to cut down their emissions and other contributions to global warming – poor them. Many, including ExxonMobil, say they’re trying to eliminate or offset their greenhouse gas emissions by 2050 but, according to independent researchers, few companies have shown credible plans to achieve their targets.

The number of publicly listed corporations aiming for net zero rose from 417 to 929 between 2020 and 2023, according to the Net Zero Stocktake report. A basic checklist was applied to corporate claims including setting interim targets and covering all the emissions a company is responsible for – including Scope 3 emissions.

Fewer than 5% of the companies examined passed the test.

So it’s really no wonder that they’re all watching the ExxonMobil lawsuit closely; is the best way to offset emissions suing the people holding you accountable?

Industry group the American Petroleum Institution says the lawsuits are meritless and politicized. ExxonMobil’s take is that since it’s acknowledged that climate change is real and, noted in its statement to NPR, is pursuing more than $20 billion of “low emission investments” between 2022 and 2027 then it shouldn’t have to answer to activist investors.

The oil and gas company doesn’t have a good track record.

The investment its making is on top of nearly $5 billion it spent buying a company specializing in carbon dioxide capture. The thing is, if it’s really so committed to the climate cause, why do shareholder proposals about its emissions annoy the company so much?

If you look at the numbers, its dedication suddenly seems… smaller.

The amount that ExxonMobil spends on its traditional energy business is staggering: last year it struck a deal to buy oil and gas company Pioneer Natural Resources, valued at almost $60 billion.

Activist investors use shareholder proposals to push corporations on climate. Experts say other investors, from whom Arjuna and Follow This struggle to get support, are hesitant to back new climate proposals when companies already have policies to disclose and cut emissions.

Investors worry proposals have become too prescriptive and might interfere with how companies are run.

It seems at least possible that changing how companies are run is the answer to cutting carbon emissions, but that it may reduce the profit investors see – a conundrum indeed within a capitalisic snowglobe, while everyone else burns.

ExxonMobil says it’s dedicated to cutting emissions from its operations but the idea that activist investors like Arjuna and Follow This can quickly push the company out of the oil and gas business with new climate policies is “simplistic and against the interests of the vast majority of ExxonMobil shareholders.”

ExxonMobil told NPR that while shareholders are entitled to submit proposals to the company, they don’t have “an unlimited right to put forth any proposal to do anything.

“Their intent is to advance their agenda rather than creating long-term value for shareholders,” ExxonMobil said of Arjuna and Follow This.

This appears to insist that having a planet to stand on is somehow not in the long-term interest of ExxonMobil shareholders. Which is how conspiracy theories get started.

Corporate America doesn’t like the shareholder proposals process and became increasingly frustrated by it after the SEC issued guidance in 2021 that made it harder to turn away some resolutions.

The National Association of Manufacturers has argued that forcing companies to publish shareholder proposals that deal with “contentious issues unrelated to [their] core business or the creation of shareholder value,” including climate change, violates their First Amendment right of free speech.

Crain says activists spend too much time pursuing a “political goal” and should instead try to help companies “understand and mitigate those climate related risks or opportunities for their operations.”

Critics of the ExxonMobil say its lawsuit is part of a broader effort to curtail shareholder activism, especially around social and environmental issues. “And the reason is because it’s one of the few effective avenues left to hold companies accountable,” says Zinner of the Interfaith Center on Corporate Responsibility.

So is the ExxonMobil lawsuit political or not?

Will ExxonMobil go down swinging?

The post Oil and gas company says suing climate activists isn’t political appeared first on TechHQ.

• Italy’s Piracy Shield breaks multiple sites.
• CDNs’ clients hit by association.
• Even limited censorship breaks parts of the internet.

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The Public Sector’s UK Choice for Secure Sovereign Cloud

Political parties are fond of making big promises, especially when in opposition, and few such claims are more specious than the promise to ‘clean up the internet’ to protect its citizenry from the scourges of pornography, piracy, and terrorism.

Political statements on the matter usually contain the word ‘children’ in the context of child abuse or protecting minors from the evils that lurk just a couple of mouse clicks away. While their aims are entirely laudable, they ignore or are unaware of the fact that the internet is not a place that can easily be policed either at national boundaries or by filtering content in an effective manner. The digital domain was never designed in a way that would allow total oversight, and attempts to impose the type of stricture required after the fact will always be hugely imperfect. Circumvention of stricture is in the digital DNA of the internet.

“Via Tasso, Sorrento – Italy football shirts” by ell brown is licensed under CC BY 2.0.

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That’s never stopped governments trying, of course, with the latest attempt from the Italian government coming in the form of its Piracy Shield. This was designed to address just a small area of lawlessness: the highly popular activity of watching live sports streams without paying the official providers of such services.

Given such a tight remit, it may have been imagined to be a relatively trivial undertaking. Unfortunately, that’s proved not to be the case.

Sports fans at the weekend just gone soon discovered firsthand how complex a specifically-targeted act of traffic blocking can be.

An IP address belonging to CDN Cloudflare found itself on the wrong side of Italy’s Piracy Shield, which prevented innocent traffic from reaching the ODW Prison Volunteers Association and Elimobile, a telecomms company, among others.

“Stade de France – Italy-France football game” by Eric-P is licensed under CC BY-NC-ND 2.0.

Part of the issue is the complexity of the modern internet, where content distribution networks deliver large portions of online content. They offer this service because they’re better than smaller hosts at ensuring streams of data are delivered safely. Independent servers are more likely to suffer from interruptions caused by bad actors, and the fast voluminous cache-ing capabilities of CDNs makes their use logical in many instances; large-scale video streaming being one of the primary among them.

But because large CDNs aggregate data from multiple sources, the nefarious actions of just one of those sources can cause all of its clients to be tarred with the same brush. Bad actors are as wont to use CDNs as lawful parties, and traffic delivery assignment algorithms can’t differentiate between them. Additionally, it’s easy to mistake genuine traffic for bad traffic. In short, at a low level, things are very, very complicated, in ways not easily explained to those who draft laws.

The Italian experience should be a salutary lesson for lawmakers the world over. Even with a tightly constrained remit, the fallout from attempts to control the digital arena is unpredictable. As a rule of thumb, preventing dubious data movements is borderline impossible to achieve with any accuracy. The public has to be made aware of this fact, so that when the next clarion call goes out for legislation to ‘protect the children,’ the populace recognizes there may be secondary motives – or utter ignorance – at play. Both possibilities are equally alarming, and it’s naive to believe that people in government are any smarter than most.

The post Italy’s Piracy Shield proves the internet works appeared first on TechHQ.

• Brussels regulators investigated Apple following a Spotify complaint, leading to a hefty penalty.
• The EU focused on the rule by Apple preventing app developers from linking to outside subscription sign-up pages.
  
• The battle between Spotify and Apple has been ongoing for years – and Apple is expected to vigoroulsy appeal.

A colossal clash has between two industry behemoths – streaming powerhouse Spotify and tech titan Apple – has been unfolding for months. Spotify has leveled charges of anti-competitive behavior against Apple, contending that the Silicon Valley giant employs its market dominance to throttle competition and hobble rival services. But it’s not just the combatants locked in this struggle; European regulators have also stepped onto the battlefield, poised to challenge Apple’s stronghold over its app store empire. 

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Spotify clashes with Apple but isn’t so angelic itself

Spotify argues that Apple’s strict regulations and steep fees are barriers to competition, stifling creativity and limiting consumer options. The contentious issue of the “Apple tax” looms large – a term coined to describe the substantial commission fees exacted by Apple on in-app purchases. 

For Spotify, this translates to navigating a landscape where every musical note played carries a hefty price tag, jeopardizing its ability to maintain a competitive edge and sustain profitability. Beyond financial concerns, Spotify alleges that Apple’s influence permeates the user experience, with accusations of preferential treatment towards its music streaming service, Apple Music, fueling claims of anti-competitive behavior and igniting industry-wide debate and dissent.

At the forefront of Spotify’s battle is CEO Daniel Ek, who’a spearheading the fight against what he views as Apple’s monopolistic grip on the music streaming sector. In an October 2023 op-ed for the UK’s (avowedly right-wing) Daily Mail, Ek condemned Apple’s imposition of a 30% tax and restrictive regulations on developers, many of whom played pivotal roles in shaping iOS into its current form. Ek also highlighted Apple’s shifting stance towards these developers, now seen as adversaries by the tech giant.

Daniel Ek, Founder & CEO, Spotify, makes progress in his Apple battle. (Photo by Noam Galai/GETTY IMAGES NORTH AMERICA/Getty Images via AFP).

Frustrated by what he sees as Apple’s anti-competitive practices, Ek has not shied away from taking his concerns public. In a bold move, Spotify filed a complaint with the European Commission in December 2023, alleging that Apple’s behavior violates EU competition law. The legal battle has ever since underscored the high stakes involved. Neither Apple not Spotify has shown a willingness to blink first.

For Ek, the fight against Apple is more than just a business dispute – it’s allegedly a matter of principle, inasmuch as such things can be said to apply to big business. Ek claims to envision a future where innovation flourishes in “a fair and open marketplace,” where consumers have genuine choice, and competition breeds excellence. To achieve this vision, Ek remains steadfast in his commitment to holding Apple accountable for its actions and advocating for a level playing field for all players in the music streaming industry.

This of course should not detract from Spotify’s own pitiful remuneration of artists who appear on the streaming platform. There are matters of principle and matters of profit involved in both companies’ operations – and it’s rare that they can be counted on to intersect.

What is the outcome for Apple and Spotify in the EU?

Before the latest complaint filed in December 2023, Spotify lodged an official antitrust grievance with the European Commission nearly four years ago, citing Apple’s anti-competitive practices that impeded innovation and detrimentally affected developers and consumers globally, especially in Europe. Despite the passage of time, the situation remains essentially unchanged, according to the streaming giant.

Spotify noted that the absence of definitive regulatory intervention has encouraged Apple to persist in its questionable conduct. Despite a growing chorus of advocates clamoring for action, regulators have been slow to act decisively, leaving a palpable frustration among stakeholders.

Before the complaint was filed two months ago, Spotify and seven other companies and organizations in sectors including publishing, audio streaming, dating, communications, and marketplaces sent a joint letter in January 2023 to call for meaningful regulatory action against Apple’s long-standing allegedly anti-competitive European practices.

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After much back and forth between regulators and the tech giants, on February 19, 2024, the bloc announced its intention to fine Apple for allegedly breaching EU law concerning access to its music streaming services. This historic penalty marks a pivotal moment in the ongoing battle between regulatory authorities and Silicon Valley giants, underscoring the EU’s commitment to enforcing fair competition practices in the digital realm.

The EU’s decision to impose its first-ever fine on Apple also sends a clear message to the tech industry: compliance with EU regulations is non-negotiable. Reports indicate that this development follows a protracted investigation by EU authorities, drawing on insights from five individuals intimately familiar with the case. Their direct knowledge sheds light on the intricate details of the long-running probe, revealing the meticulous scrutiny of Apple’s business practices.

“In a closed-door meeting between EU officials and Apple in June last year, the tech firm told regulators it had already addressed any possible competition concerns arising from Spotify’s complaint,” a report by Bloomberg reads. For Apple, although accustomed to navigating complex regulatory landscapes, this fine represents a significant setback. 

When contacted for comment, Bloomberg also noted that Apple referred to a previous statement, which said that the “App Store has helped Spotify become the top music streaming service across Europe.” The translation of that terse statement is that Apple is expected to vigorously challenge the fine, using its formidable legal and financial resources to defend its practices. Nevertheless, the EU’s unwavering stance underscores the imperative of upholding fair competition principles to safeguard consumer choice and innovation within the digital ecosystem. 

This decision has broader implications for the tech industry. As the tech landscape continues to evolve, this fine against Apple is a poignant reminder of the regulatory challenges confronting industry titans. With the EU leading the charge in enforcing antitrust laws, the repercussions of this decision will surely reverberate across the global tech industry, shaping the future of digital competition and regulation for years to come.

The post EU fines Apple €500m in Spotify showdown appeared first on TechHQ.

• Raimondo warns against unwanted access for China to US cloud technology to build AI.
• The Secretary of Commerce is acting to block use of US tech for AI by China due to “security concerns.”
• The move, impacting players like Amazon and Microsoft, is anticipated to escalate tech tensions with China.

The long-standing rivalry between the US and China has evolved into many facades over the last decade. The intensifying competition underscores economic supremacy and national security concerns, shaping the dynamics of a burgeoning tech war. Last year, the battleground extended into the development of AI, but this year, the US has indicated the desire to control and dominate local cloud computing services. 

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Will US cloud computing restrictions on China have any impact?

Recent proposals suggest stringent measures to curb China’s access to US cloud computing firms, fueled by concerns over the potential exploitation of American technology for AI advancement. In a recent interview, US Secretary of Commerce Gina Raimondo emphasized the need to prevent non-state actors and China from utilizing American cloud infrastructure to train their AI models.

“We’re beginning the process of requiring US cloud companies to tell us every time a non-US entity uses their cloud to train a large language model,” Raimondo said at an event on January 27. Raimondo, however, did not name any countries or firms about which she was particularly concerned. Still, the maneuver is anticipated to intensify the technological trade war between the US and China, and signify a notable step toward the politicization of cloud provision.

The focal point of this battle lies in recognizing that controlling access to cloud computing is equivalent to safeguarding national interests. Raimondo parallels the control exerted through export restrictions on chips, which are integral to American cloud data centers. As the US strives to maintain technological supremacy, closing avenues for potential malicious activity becomes imperative.

Therefore, the proposal mandates explicitly firms like Amazon and Google to gather, store, and scrutinize customer data, resembling the weight of stringent “know-your-customer” regulations akin to those shaping the financial sector. Conversely, China has been aggressively pursuing AI development, seeking to establish itself as a global leader in the field. 

The US concerns stem from the dual-use nature of AI technologies, which can have both civilian and military applications. The fear is that China’s advancements in AI could potentially be leveraged for strategic military purposes, posing a direct challenge to US national security.

Of AI, cloud computing, and the US-China tech war

China’s Premier Li Qiang (R) speaks with US Commerce Secretary Gina Raimondo during their meeting at the Great Hall of the People in Beijing on August 29, 2023. (Photo by Andy Wong/POOL/AFP).

Although the US broadened chip controls in October, focusing on Chinese firms in 40+ nations, a gap remains. That is why it is paramount for the US to address how Chinese companies can still leverage chip capabilities through the cloud. Cloud technology has become the backbone of modern businesses and governments, making it a critical asset in the ongoing tech war. 

From start to finish, cloud computing is inherently political, Trey Herr, director of cyber statecraft at the Atlantic Council, told Raconteur. He said that its reliance on extensive physical infrastructure tied to specific jurisdictions makes it susceptible to local politics, adding that conversations about cloud security inevitably take on political dimensions.

READ NEXT

Huawei ends DC lobbying: What’s next for US-China relations?

In October 2023, Biden mandated the US Department of Commerce mandate disclosures, aiming to uncover foreign actors deploying AI for cyber-mischief. Now, the Commerce Department, building on stringent semiconductor restrictions for China, is exploring the idea of regulating the cloud through export controls. Raimondo said the concern is that Chinese firms could gain computing power via cloud giants like Amazon, Microsoft, and Google.

“We want to make sure we shut down every avenue that the Chinese could have to get access to our models or to train their models,” she said in an interview with Bloomberg last month. In short, China’s strides in AI and cutting-edge technologies are a paramount worry for the administration. After all, despite Washington’s efforts to curtail China’s progress through chip export restrictions and sanctions on Chinese firms, the nation’s tech giants resiliently achieve substantial breakthroughs, challenging the effectiveness of US constraints.

Nevertheless, regulating such activities in the US is still being determined because cloud services, which do not involve physical goods transfer, fall outside export control domains. Thea Kendler, assistant secretary for export administration, mentioned the potential need for additional authority in this space during discussions with lawmakers last month.

Addressing further loopholes, the Commerce Department also plans to conduct surveys on companies developing large language models for their safety tests, as mentioned by Raimondo on Friday. However, specific details about the survey requests were not disclosed.

What are cloud players saying?

As with previous export controls, US cloud providers fear that limitations on their interactions with international customers, lacking reciprocal measures from allied nations, may put American firms at a disadvantage. However, Raimondo said that comments on the proposed rule are welcome until April 29 as the US seeks input before finalizing the regulation.

What is certain is that the cloud will persist as an arena for trade war extensions and geopolitical maneuvers. Nevertheless, this tech war has broader implications for the global tech ecosystem. It prompts questions about data sovereignty, privacy, and the geopolitical alignment of technological alliances. As the US seeks to tighten its grip on the flow of technology, China is compelled to find alternative routes to sustain its AI ambitions.

The outcome will shape the future trajectory of technological innovation, with ramifications extending far beyond cloud computing and AI development. 

US Commerces Secretary Gina Raimondo confirms the full on economic war on China (and US businesses).

The goal of the US is to slow down China's tech advances. US gonna double down on its sanctions on China pic.twitter.com/7MTyq5IpFO

— Carl Zha (@CarlZha) December 7, 2023

The post Biden weighs blocking China’s access to US cloud tech, fearing AI advancement appeared first on TechHQ.

The growth of AI applications has revolutionized the data center industry, but it hasn’t come without challenges. One of the foremost concerns is the increased power consumption and high-power density environments that AI demands, significantly impacting the physical infrastructure requirements of data facilities.

In the late 1970s, data center power density was generally between 2 kW and 4 kW, but now, it is not uncommon to exceed 40 kW to accommodate AI or HPC (high-performance computing) workloads. In November, Silicon Valley Power revealed that its forecasted annual data center load in 2035 “almost doubles the current system load.”

Colm Shorten, Senior Director of Data Centers at JLL Real Estate, said: “It’s true to say that data center infrastructure hasn’t changed a great deal in 20 years, so there are models of design that are used repeatedly, whether they’re based on uptime or five-nine availability.

“The fundamental thing was always making sure the data center runs, has power, has network, has cooling, and has security. They typically would have been running in the medium to high single digits, about 8 to 12 kW, and 19 kW would be considered high.

Source: Legrand Data Center Solutions

“What AI has done in a disruptive sense is that it’s challenged what those power requirements are, so rack density and rack power requirements have increased. If you generate a lot of power, you generate a lot of heat. If you generate a lot of heat, you’ve got to dissipate that heat and get rid of it.”

“There needs to be a mind shift now on how we cool these racks and how we deliver power to the racks based on the demands from AI,” added David Bradley, the Regional Director of Ireland and Central Eastern Europe at Legrand Data Center Solutions.

The challenges AI places on the data center industry

As computing power and chip designs advance, equipment racks double in power density every six to seven years. According to the Uptime Institute, more than a third of data center operators say their densities have “rapidly increased” in the past three years. Densification of AI server clusters requires a shift from air to liquid cooling, bringing challenges such as site constraints, obsolescence risks, installation complications, and limited sustainable fluid options. Specialized cooling methods like rear door heat exchangers also become necessary to address maintain redundancy and efficiency.

The multifaceted nature of AI workloads adds another layer of complexity. Training demands less redundancy but emphasizes cost-efficiency. Mr. Bradley said: “Training AI is not latency-dependent, so it might mean that you could actually deploy new data centers somewhat outside of the central FLAPD region.”

Mr. Shorten added: “In the past, we would typically find a site that’s within either a cloud region or a densely populated metro, build a data center there, and bring the power to it.  Now you bring the data center to the power. AI training sites are less latency-sensitive than a traditional cloud model. That means we can get access to power that traditionally wouldn’t have been available.”

The surge in AI demands intensifies network requirements too, placing added stress on data centers to ensure robust connectivity and low latency. At the same time, the imperative for power redundancy and resilience amplifies. This necessitates high-reliability mechanisms and seamless switching between power sources to avert downtime risks for the data center at large. Operational risks such as power surges and harmonic distortions caused by non-linear components pose continual threats to efficiency and safety, often culminating in overheating issues.

According to Mr. Shorten, the evolving nature of data center requirements for AI workloads means operators need to think about future-proofing facilities. He said: “We have to develop what’s called a hybrid solution because if we build a pure traditional model, there’s a risk of it becoming obsolete in two to four years’ time.

“When you think that building and developing your data center costs somewhere between $7 million and $10 million a MW – you build a large 100 MW data center, you’re into billions. Then you need that asset to last 15 to 30 years. Admittedly there’s a technology refresh in between, but if you have to change your cooling technology or your power distribution after year six or seven when some of these AI components that we’re finding today become almost commoditized, then you’re going to have a challenge.

“Some of these machines and applications are physically heavy, so if I built a data center 20 years ago, I’d have 12 kN in a floor and would have to go up two stories. If I’m adding on rear door heat exchangers and other infrastructure, that may go up to 15 to 20, 30 kN. It’s very difficult to re-engineer and retrofit that – i.e., print a new floor – in year two or three.”

Mr. Bradley added: “You could add 200 to 300 kg of weight on a rack. Now, what you’ve got is a floor that cannot take that. Then there’s a knock-on effect; you do one thing to retrofit that, then that affects something else, and that affects something else.

“So you have to look at the requirements of AI – fundamentally, the power and the cooling demands of AI – and then your design goes around from there.”

However, not all the challenges of surging AI demands relate to physical infrastructure. Regulators can struggle to predict the technology’s trajectory, leading to varied regulatory approaches like the EU’s AI Act and the NIS2 Directive. This makes it difficult for data center operators to navigate compliance requirements and adapt their infrastructure accordingly.

Similarly, it becomes more difficult for data centers to meet their sustainability goals. According to the 2022 Data Center Industry Survey by the Uptime Institute, 63 percent of data center operators expect mandatory sustainability reporting in the next five years. The Corporate Sustainability Reporting Directive (CSRD) will start to impact some EU-based businesses from January 1, 2024, and will necessitate reporting new metrics like water and carbon use effectiveness. That’s more pressure to prolong infrastructure, recycle coolants, partner with sustainable suppliers, and implement renewable energy sources.

As data volume increases, so do security risks, with AI introducing new threats like automated attacks and vulnerability identification. But these are not always malicious, as, according to a recent study from the Uptime Institute, nearly 40 percent of organizations have suffered a major outage due to human error since 2020. Of these, almost 85 percent were caused by staff failing to follow procedures or flaws in the processes followed. Data centers must implement advanced encryption, biometric authentication, and cybersecurity solutions to counter unauthorized access and monitor for anomalies.

Mr. Shorten said: “From a security standpoint, AI is kind of a double-edged sword. The positive is that AI is very good if you were to apply it to look at changes in patterns. So, if there was a cyberattack or somebody was breaking into your environment, from a network standpoint it can pick up abnormalities. On the flip side, it’s very, very powerful and can be used in a bad way by bad actors.

“The guys who are cybercriminals and the guys who are building security and protection are constantly battling with each other to develop either their protection or penetration.”

Solutions to the challenges

As the number of challenges has grown, so have the available solutions. Mr. Bradley said: “You need to address the demands that AI brings from both a power and cooling perspective and we, Legrand, have those solutions.”

Innovative designs like USystems’ Rear Door Coolers optimize thermal management while addressing challenges associated with space constraints and sustainable cooling options.  They ensure optimum thermal and energy performance by removing the heat generated by active equipment at source, preventing hot exhaust air from entering the data room. The coolers allow load removal of up to 92 kW per cabinet and have been recognized with the award of the UK’s most prestigious business prize: the Queen’s Award for Enterprise: Innovation.

Source: Legrand Data Center Solutions

Robust systems cool racks that run AI applications. Minkels’ Nexpand cabinets come with airflow management accessories designed to seal gaps, manage cable entry, and create an airtight environment for effective airflow control. Liquid cooling solutions, such as direct-to-chip or immersion cooling, are also increasingly adopted to manage high-density environments, dissipating heat more effectively than traditional air-cooling methods.

Intelligent rack power distribution units (PDUs) like the Raritan PX4 and the Server Technology PRO4X rack PDUs have been designed to handle the high power consumption and density AI brings. These best-in-class PDUs offer industry-proven high density outlet technology and ground-breaking intelligence features that cater to complex AI requirements. Modular solutions and customizable cabinets provide the flexibility and scalability required to accommodate future growth.

Track Busway solutions with monitoring points can identify potential energy efficiency and reliability improvements, helping to make power distribution more responsive to dynamic needs. Busways designed with oversized neutral conductors and power meters – for example, the Starline Critical Power Monitor – can also mitigate the operational risks of power surges and harmonic distortion. The Track Busway from Starline also helps cut electrical installation time by 90 percent, thanks to its first-of-its-kind access slot, which allows for flexible layout changes without service interruption. High-density fiber solutions such as Infinium acclAIM can meet any low-latency requirements of AI inference alongside other network demands, ensuring quick response times and efficient data transmission between metropolitan hubs and data centers.

Intelligent cabinet locking systems, like Nexpand’s Smart Lock, meet regulatory compliance mandates from PCI DSS, SOX, HIPAA, GDPR, and EN50600. Cabinets can be opened remotely or let a user monitor who opened a cabinet and work in tandem with video surveillance solutions. Physical security like this helps, but operators should consider intelligent PDUs equipped with the latest network security protocols, and that offer diverse options for user authentication, password management, and best-in-class data encryption methods.

Energy-efficient hardware adoption and renewable energy sources are crucial to reduce data center operating costs and carbon footprint. Environmental monitoring devices, like SmartSensors from Raritan, can track entire facilities’ temperature, humidity, and airflow, enabling precise cooling management that minimizes energy waste. Monitoring data helps predict potential equipment failure, reducing the likelihood of unexpected downtime, and informing decisions regarding infrastructure upgrades, layout changes, or equipment replacements that will reduce energy usage.

Mr. Shorten said: “Between power, because of their Starline busways, and between what they do in rear door heat exchangers, Legrand has very innovative solutions that are helping us on that journey.

“They’re listening to the customer and providing solutions that we think are both innovative and that are going to help us meet the needs and demands that AI and high-performance computing bring in a sustainable way.”

With customizable, modular designs tailored for increasing power consumption, Legrand offers scalable solutions to meet evolving demands. Its approach ensures reliability, security, and energy efficiency for future-ready data centers. Legrand’s expert team assists in navigating complexities, optimizing every stage from design to management.

Learn more about how Legrand can prepare your business for AI by visiting its website here.

The post How the demands of AI are impacting data centers and what operators can do appeared first on TechHQ.

• Gaming in China to escape industry-killing restrictions?
• Rules on gaming in China have been removed from  the website where their terms were listed.
• But were they actually draconian – or a prescription for mental health among the gaming community?

In recent years, China gaming crackdowns have been fodder for us-and-them discourse, the idea of a regulating body deciding how long young people could game being almost as heinous (more, to some) than the one-child policy that ended in 2016.

Back in 2021, China’s video game regulator said online gamers under the age of 18 would only be allowed to play for one hour on Fridays, weekends, and holidays. Let’s face it, sometimes threatening a kid with legal action feels like the only way they’ll listen to you – especially when you tell them to turn off their devices.

In China, gaming was branded “spiritual opium” by media outlets, as rising concerns about the impact of excessive gaming on young people meant the government stepped in. As recently as December of last year, draft legislation was publicized that would limit the amount people could spend on video games.

Sure, gaming crackdowns hurt the young people they restrict, but have we considered the monetary loss to gamemakers? Please, God, won’t somebody think of the gamemakers?!

If online games stopped offering rewards for excessive play time and in-game spending, including those for daily logins, as the industry regulator stipulated, people would play less and – no, surely not! – spend less on gaming.

“The removal of these incentives is likely to reduce daily active users and in-app revenue and could eventually force publishers to fundamentally overhaul their game design and monetization strategies,” said Ivan Su, an analyst at Morningstar.

The biggest global gaming market is China, so any changes are high stakes.

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But after a U-turn from China, gaming companies can breathe again. The National Press and Publication Administration (NPPA) has removed the December drafts from its site. The apparent change in opinion has seen share prices of Chinese gaming firms jump.

Shares in Tencent Holdings, the world’s biggest gaming company, and its closest rival NetEase, rose as much as 6% and 7% in morning trading respectively. In December, nearly $80bn was wiped from their values, so there’s definitely ground to recover.

All the same, there’s still uncertainty about the future of China’s gaming industry. Su said he thinks ambivalence around gaming will “probably last for quite some time, unless we get a very drastic turnaround in government rhetoric, or unless we get some super supportive policies.”

The link to the proposed legislation now opens an error page – possibly the first time in history users have been glad to see one.

The removal of the potential rules from the NPPA website was described by analysts as unusual. However, the consultation period on the rules ended on Monday, the day before their disappearance, suggesting a revision is in store.

After the market turmoil the initial proposal caused, the NPPA took a more conciliatory tone, and Feng Shixin was removed from his position as head of the publishing unit of the Communist Party’s Publicity Department, which oversees the NPPA.

The two most contentious articles of the China gaming crackdown were articles 17 and 18. Article 17 seeks to ban videogames from forcing players into combat, which is the key mechanic of the majority of contemporary multiplayer games.

Article 18 would require games to set a spending limit for players and bar features incentivizing in-game spending. Su “expects the government to remove Article 17 (prohibition of mandatory player-versus-player) and 18 (imposing spending limit) from the final rule,” he told Reuters.

It might not be a popular opinion, but maybe limiting the features of gaming that the Chinese restriction have done could be a good thing…

In the same way that Meta has faced lawsuits for knowingly enabling addictive features in its social media, perhaps it’s time to reconsider what “spiritual opium” we allow kids access to.

Okay, we aren’t sure the opium thing will stick, but the idea of reducing the money spent on virtual rewards and combat-focused gameplay doesn’t seem that outrageous if you separate it from the fact that it’s the Chinese government that was insisting on it, and look at lawsuits that are still live in the US.

Watch this gaming space.

Are the new restrictions now defunct?

The post Gaming in China is so back, baby appeared first on TechHQ.

• Generative AI copyright issues won’t be solved by blockchain.
• Multiple lawsuits attempt to claw back owners’ rights.
• Use of ‘scraped’ materials is ‘fair use.’

The economic viability of machine learning as a service (MLaaS) is being stymied by a host of lawsuits, most notably against Anthropic and OpenAI. In all cases, owners of copyrighted material object to and seek compensation for the use of materials used without their permission to train machine learning models.

Generative AI models used by companies like OpenAI scrape vast amounts of data from the public internet, but the companies claim their methods constitute ‘fair use’ of publicly-available materials. There are several legal arguments in play, including “volitional conduct,” which refers to the idea that a company that commits copyright infringement has to be shown to have control over the output of the disputed materials. In short, if you can get OpenAI to disgorge a line of poetry, verbatim, that’s been published under a notice of copyright (say, at the bottom of the web page it’s published on), OpenAI is in breach of copyright.

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OpenAI saving the world, for a price

In the case of the New York Times‘s action against OpenAI, the newspaper claims the ML engine crawled and absorbed millions of NYT articles to inform the popular AI engine, gaining a “free ride on the Times’s massive investment in its journalism,” according to the text of the lawsuit.

Generative AI copyright lawsuits

Similar cases have been brought against Midjourney and Stability AI (owners of Stable Diffusion) by Getty Images, who also cite copyright infringement of images they own the rights to. Class action suits have also been brought DeviantArt, whose machine models produce images from users’ text prompts.

Giving evidence to the UK’s House of Lords Communications and Digital Select Committee, OpenAI claimed, “[…] it would be impossible to train today’s leading AI models without using copyrighted materials.” In this, the company admits it’s trained models on materials legally owned by others, but it’s ‘fair use.’

Source: fosstodon.org

The case of Getty Images is particularly noteworthy. The company had steered wide of any AI image creation offering, citing “real concerns with respect to the copyright of outputs from these models and unaddressed rights issues with respect to the imagery, the image metadata, and those individuals contained within the imagery,” said Getty’s CEO, Craig Peters in an article in The Verge in 2022.

However, the company announced ‘Generative AI by iStock’ at CES 2024, which draws on its library of images, claiming legal protection and usage rights for content creators. “You can rest assured that the images you generate, and license, are backed by our uncapped indemnification,” the company’s website now states, and that it’s “created a model that compensates […] content creators for the use of their work in our AI model, allowing them to continue to create more […] pre‑shot imagery you depend on.”

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ChatGPT-enhanced Bing mobile app: first impressions

Enforcing copyright has always been problematic online, especially if the owner of published media lacks the backing of a phalanx of sharp-toothed lawyers, shoals of whom tend to congregate around large businesses and organizations rather than independent content creators. The choice for artists, musicians, and even part-time bloggers has always, since the internet began, been whether or not to publish. Put the message or media ‘out there,’ and it’s open to potential exploitation by others. Don’t publish digitally, and risk obscurity. Halfway houses like robots.txt files that state “No ML crawlers” in the same way that it’s hoped search engines will not index website pages (“no follow, pleeease”) are a gamble that trusts the inherent good nature of huge corporations controlling the ML models, like Microsoft in the case of Open AI.

Because nobody ever got burned trusting huge corporations. Right?

Blockchain to solve copyright issues?

Speaking to Business Insider last week, the CEO of cryptocurrency trading specialist Greyscale, Michael Sonnenshein, suggested blockchain would be an immutable way of proving copyrighted material’s provenance. “[…] To us, it’s just so obvious that you need an irrefutable, immutable technology to marry [authenticity and ownership], to actually head-on address some of the issues, and that technology is blockchain, which underpins crypto[currency]. […] All of a sudden, issues like provenance and authenticity and ownership, etc., get resolved really, really quickly.”

There are three reasons why Sonneshein’s assertions are fallacious. Firstly, we already have an ascertained authenticity via blockchain: it’s a Ponzi scheme called NFTs, which are vauled only by the idiots who trade in them. Secondly, blockchain publication has the potential to be ecologically disastrous. The coin mining industry for Bitcoin, Ether, and Monero produces the equivalent carbon of a medium-sized country each year. For example, each $1 value of Bitcoin produces $0.50 in environmental and health damage (primarily through air pollution from fossil fuel generation powering mining rigs). Thirdly, if we ensure creators are “properly compensated and credited for what they produce,” because blockcahin tells us, without doubt, who they are, we have come full circle. To re-quote OpenAI’s statement in the UK’s House of Lords committee rooms:

“[…] it would be impossible to train today’s leading AI models without using copyrighted materials.” What the word “impossible” means, in context, is “too costly.” Could you imagine a world where big AI-as-a-service providers track down and pay every content creator on the internet for the use of their work to train AI models? No, neither can we.

As a content creator, the only sure-fire way to protect copyright is to digitally encrypt every item, or place it behind some kind of insurmountable barrier where it can’t be scraped. That’s a paywall, or equivalent walled garden in front of every creator’s work. At a stroke, the internet – designed to be a place for the free and open interchange of ideas, knowledge, and perhaps art – becomes the victim of voracious machine learning algorithms controlled by global businesses.

The world in which generative AI and copyright peacefully co-exist may be attainable. What it won’t be is either cost-effective or easy to achieve.

“Golden Sky Trawler” by 4BlueEyes Pete Williamson is licensed under CC BY-NC-ND 2.0.

The post Blockchain won’t stop AIs stealing copyrighted work appeared first on TechHQ.

• Low prices on solar panels are set to continue.
• Subsidies on fossil fuels make renewables more expensive.
• Invest now before green taxes land in the EU and elsewehere.

Stockpiles of solar panels in the US and EU have grown sharply, with capacity held nearly twice that of expected demand for the panels, the International Energy Agency (IEA) has reported.

The oversupply has caused a price cut, reducing wholesale rates by nearly half. The IEA says that the mismatch between manufacturing and sales will continue until 2028. Rather than further price drops, the agency predicts that manufacturers will “focus on cost-cutting and innovation,” edging out smaller manufacturers that cannot compete due to their smaller economies of scale.

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For businesses looking to decrease their carbon footprint, using solar energy sources can offer tax incentives, a more sustainable investment profile, and highly marketable CSR wins.

Solar panels to reduce fossil fuel reliance

As part of the European Green Deal, the EU is aiming for a 55% reduction in greenhouse gases across the continent by 55%, and to become entirely carbon-neutral by 2050. The Green Deal will likely be backed by so-called green taxation, penalizing high-emissions organizations. The EU also plans to use subsidies, what it describes as ‘pricing instruments,’ and public infrastructure investment to achieve its goals of a more sustainable Europe-wide economy.

“Northeast Solar Energy Research Center” by Brookhaven National Laboratory is licensed under CC BY-NC-ND 2.0.

Currently, many countries, including most member states, subsidize fossil fuel consumption, a legacy policy intended to promote production and economic growth. The Energy Taxation Directive, last updated in 2003, does not link CO2 emissions to tax rates applied to energy sources.

Furthermore, the ETD exempts aviation and maritime fuel from tax, a mandate clearly out of sync with the European Green Deal. Significant legislative and fiscal changes are clearly afoot.

Joe Biden’s agenda in 2021 proposed removing or reducing the tax breaks on domestic fossil fuels, which account for around $20bn per year of effective subsidy, most of which goes to oil and gas producers. Across the EU, 55 billion Euros annually were similarly granted as of 2019.

So the current oversupply of solar panels offers a prime opportunity for organizations to invest in green energy, with market prices due to stay low for the next four years – at least, according to the International Energy Agency. The higher cost at the point of consumption of renewable energy is due to electricity suppliers passing on the extra costs associated with its storage and distribution, according to The Economist. In a market for electricity, suppliers competing on price will favor the lower cost of fossil fuels.

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Meanwhile, the capacity for solar power generation will remain underutilized, with the manufacturing pipeline set to produce panels capable of 1,300GW output by 2028, the IEA stated. That figure assumes no particular changes in technology to develop more efficient panels.

While the climate crisis remains a bogey-man many choose to ignore, the IPCC (Intergovernmental Panel on Climate Change) predicted in 2021 that the planet would warm by 1.5 degrees Centigrade by 2040. By 2100, according to research by University College, London, the economic cost of climate change will be between 37 and 51% of world GDP.

The choices made by individuals, governments, organizations and business have created a situation that will have massive impact on quality of life of the next generation. By the same means, individual decisions made this year can alter this outcome. Investing in solar energy now, when market conditions are attractive to even the most short-term thinking, is an unmissable opportunity.

The post Solar panel prices dip due to oversupply appeared first on TechHQ.

• Multiple entities from China bought restricted Nvidia semiconductors despite imposed restrictions.
• Nvidia or its suppliers did not facilitate the transactions, and the source of the chips remains a mystery.
• So how are the ships surfacing in China?

Nvidia Corp, the company currently dominating the AI chips market, finds itself in a complex position between the US and China amid global trade tensions (Between the Devil and South China Sea?). While the company navigates the complex web of export restrictions imposed by the US government to curb China’s tech ascendancy, the allure of Nvidia’s advanced semiconductors is proving irresistible to Chinese entities that want to defy those constraints.

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Another big year projected for Nvidia as stock prices rise

In short, Nvidia, rooted in Silicon Valley, must navigate this intricate web while watching the alluring opportunities presented by China’s burgeoning tech landscape pass them – and their Western competitors – largely by. The allure is undeniable, and in this high-stakes game of technological chess, Nvidia finds itself at the intersection of allegiance and opportunity.

A revelation highlighted by Reuters shows 2023 was a year for clandestine techno-affairs, in which Chinese military entities, state-sponsored AI research centers, and universities orchestrated a discreet “procurement” of banned Nvidia semiconductors, restricted from export to China. The examination of tender documents by Reuters revealed that these transactions, facilitated by obscure Chinese suppliers, underscore the ongoing challenges faced by Washington. Its curbs are akin to Prohibition – the more you prohibit, the harder you clamp down on things that make people happy, the more people are going to find ways to defy you.

Despite stringent bans, the US is grappling with the intricate task of entirely severing China’s pathway to cutting-edge US chips and tools that could propel advancements in AI and sophisticated military computing. In simple terms, it’s not against the law in China to buy or sell high-end US chips. So publicly available documents have revealed that several entities in China have purchased Nvidia semiconductors even after restrictions were put in place. 

For context, Nvidia makes chips called graphic processing units (GPUs), which are known to be much better than other products when handling AI tasks. They can efficiently process large amounts of data required for machine learning. These chips include the A100 and the more powerful H100, which were banned from export to China and Hong Kong in September 2022. 

Additionally, the slower A800 and H800 chips, developed by Nvidia specifically for the Chinese market, were also banned last October. The fact that Chinese firms still want and can get these banned Nvidia chips highlights the limited options available to them. Even though companies like Huawei work on alternative products, Nvidia’s GPUs are in high demand. Before the bans, Nvidia had a 90% share of China’s AI chip market.

Who in China is still buying chips from Nvidia?

(L-R) Humane Intelligence CEO Rumman Chowdhury, Nvidia CEO Jensen Huang and Microsoft CEO Satya Nadella attend the “AI Insight Forum” in the Kennedy Caucus Room in the Russell Senate Office Building on Capitol Hill on September 13, 2023 in Washington, DC. Lawmakers are seeking input from business leaders in the artificial intelligence sector, and some of their most ardent opponents, for writing legislation governing the rapidly evolving technology. (Photo by CHIP SOMODEVILLA/GETTY IMAGES NORTH AMERICA/Getty Images via AFP).

Reuters data shows buyers ranged from prestigious universities to entities facing US export restrictions—the Harbin Institute of Technology and the University of Electronic Science and Technology of China. These institutions have faced accusations of military involvement or affiliation with a military body against US national interests. 

In May, the Harbin Institute of Technology acquired six Nvidia A100 chips for training a deep-learning model. In December 2022, the University of Electronic Science and Technology of China purchased one A100, with its intended use remaining undisclosed. “The Reuters review found neither Nvidia nor retailers approved by the company were among the suppliers identified. It was not clear how the suppliers procured their Nvidia chips,” the news agency company noted.

Reuters also noted that numerous government departments submitted more than 100 requests to buy A100 chips, and even after the October ban, there have been dozens of requests for the A800. “Tenders published last month also show Tsinghua University procured two H100 chips, while a laboratory run by the Ministry of Industry and Information Technology procured one,” it added.

According to military records, a branch of the People’s Liberation Army in Wuxi, Jiangsu province, sought 3 A100 chips in October and one H100 chip this month. However, details in military records are often blacked out, and Reuters couldn’t find out who won the bids or why they made the purchases.

Most of these requests indicate that the chips are used for AI. However, the numbers purchased are small and insufficient to create a complex AI model from scratch. For instance, to build a model similar to OpenAI’s GPT, you’d need more than 30,000 Nvidia A100 cards, according to research firm TrendForce. Nevertheless, even a few of these chips can handle intricate machine-learning tasks and improve existing AI models.

In one case, the Shandong Artificial Intelligence Institute awarded a contract worth 290,000 yuan (US$40,500) to Shandong Chengxiang Electronic Technology for five A100 chips last month. Many of these contracts specify that the suppliers must deliver and install the products before receiving payment. Most universities also published notices confirming the completion of transactions.

Tsinghua University, often called China’s MIT, has been actively submitting requests and has acquired around 80 A100 chips since the ban in 2022, Reuters noted. In December, Chongqing University sought a new A100 chip through a tender, and the delivery was completed this month, as indicated in a notice.

The rise of the underground market amid US bans

The export control first announced in October 2022 has given rise to an informal underground market in China, with vendors being cautious and aiming to avoid attention from both US and Chinese authorities. After all, the global surge in demand for high-end chips, driven by the widespread success of OpenAI’s ChatGPT and the booming field of AI, led to the skyrocketing need for Nvidia’s microprocessors.

In June last year, Reuters spoke with ten vendors in Hong Kong and mainland China who described being able to procure small numbers of A100s easily. Their information highlighted the intense demand in China for the chips and the relative ease with which Washington’s sanctions can be circumvented for small-batch transactions.

Those vendors, who bought the chips outside the US, were quoting HK$150,000 ($19,150) per card, according to Ivan Lau, co-founder of Hong Kong’s Pantheon Lab, who was then trying to purchase 2-4 new A100 cards to run the startup’s latest AI models. “They told us that there will be no warranty or support.”

In the most recent documents Reuters discovered, Chinese vendors have said they snatch up excess stock that finds its way to the market after Nvidia ships large quantities to big US firms or import through companies locally incorporated in places such as India, Taiwan, and Singapore.

Responding to the reports, Nvidia states that it follows all the laws related to exporting its products and expects its customers to do the same. A spokesperson for the company mentioned that if they discover a customer has illegally sold their products to others, they will take swift and necessary action. The US Department of Commerce chose not to comment. 

Chris Miller, a professor at Tufts University and the author of Chip War: The Fight for the World’s Most Critical Technology, mentioned that expecting the US export restrictions on chips to be foolproof is impractical. He highlighted that since chips are small and easily transportable, making the restrictions completely effective is challenging.

According to Miller, the primary goal is to hinder China’s progress in AI development. By creating obstacles to acquiring large quantities of advanced chips, it becomes more difficult for them to build extensive clusters capable of training sophisticated AI systems.

The post Silicon secrets: is China defying the Nvidia chip ban? appeared first on TechHQ.