“Nvidia’s AI Chips Are Cheaper to Rent in China Than US: Supply of Processors Helps Chinese Start-Ups Advance Artificial Intelligence Technology despite Washington’s Restrictions”, 2024-09-06 (; backlinks; similar):
[prices are set by supply & demand: with barely 100,000 H100 GPUs in China—less than Elon Musk puts in a single datacenter—the demand is so low that the hourly cost is, nevertheless, competitive with the USA] The cost of renting cloud services using Nvidia’s leading artificial intelligence chips is lower in China than in the US, a sign that the advanced processors are easily reaching the Chinese market despite Washington’s export restrictions.
4 small-scale Chinese cloud providers charge local tech groups roughly $6 an hour to use a server with 8 Nvidia A100 processors in a base configuration, companies and customers told the Financial Times. Small cloud vendors in the US charge about $10 an hour for the same set-up. The low prices, according to people in the AI and cloud industry, are an indication of plentiful supply of Nvidia chips in China and the circumvention of US measures designed to prevent access to cutting-edge technologies.
…China’s larger cloud operators, such as Alibaba and ByteDance, known for their reliability and security, charge double to quadruple the price of smaller local vendors for similar Nvidia A100 servers, according to pricing from the two operators and customers. After discounts, both Chinese tech giants offer packages for prices comparable to Amazon Web Services, which charges $15–$32 an hour. Alibaba and ByteDance did not respond to requests for comment.
“The big players have to think about compliance, so they are at a disadvantage. They don’t want to use smuggled chips”, said a Chinese start-up founder. “Smaller vendors are less concerned.”
He estimated there were more than 100,000 Nvidia H100 processors in the country based on their widespread availability in the market. The Nvidia chips are each roughly the size of a book, making them relatively easy for smugglers to ferry across borders, undermining Washington’s efforts to limit China’s AI progress.
…The head of a small Chinese cloud vendor said low domestic costs helped offset the higher prices that providers paid for smuggled Nvidia processors. “Engineers are cheap, power is cheap and competition is fierce”, he said. [ie. no profits and everyone has high discount rates, so no real R&D]