Technology Abhors A Monopoly
For the US, the GPUs of Nvidia, which are fuelling the Artificial Intelligence (AI) era, were a geopolitical tool. It began to turn off and on the tap of exporting these chips to other nations, especially China, for non-commercial reasons. And even then, the company's visionary founder Jensen Huang warned that if denied, others would eventually get round to making their own GPUs. It has not even taken a couple of months for the prophecy coming to pass. This week, China ordered its biggest companies, like ByteDance and Alibaba, to stop using Nvidia chips. Being slower on the AI offtake was preferable to dependency on a foreign hostile power.
There are caveats here. China can do it because it has the scale, capital, and technology to soon catch up. For other countries, India included, these factors don't hold. On the other hand, when China catches up, the others now have an option, and so, in a circuitous way, even they won't be tied to either Nvidia or the US. China has already exhibited how it can mimic and overtake advanced technologies that originate elsewhere. It is, for example, now the leader in cutting-edge electric vehicles despite a late start.
Those who thought Nvidia's monopoly was forever and bought its stock, making it the most valued company in the world, might need to think through their thesis again. Nvidia's AI bonanza was based on decisions made just a decade ago, not a large timeframe. Plus, there is the acceleration that comes with not having a fallback option for countries like China. It has happened in the past too. After the US came up with the atom bomb, it imagined no other country would be able to get the technology for a long time. But the Soviet Union cracked it under five years and got one on their own by expending enormous resources.
The Chinese are going to do likewise with AI. It is the technology which will underpin the future, and that is worth chasing whatever it takes, no matter the cost