China’s AI companies will not be able to keep up with their US rivals in 2024 due to its choked access to high-end chips, research company GlobalData has predicted. 

Throughout 2023, US export bans have halted China’s access to key chips needed for AI development, such as graphics processing units (GPUs).

As the computing power necessary to train AI models grows at a rapid pace, Chinese companies will likely be held back by less powerful GPUs, according to GlobalData’s Thematic Intelligence: Tech, Media, & Telecom Predictions 2024 report. 

China will be able to break through in certain industry-specific AI and tech hardware applications, GlobalData said. 

However, by the time the country has began to develop its own high-end chips at the same frequency as the US, large-scale rivals like OpenAI would have advanced too much to catch up with, according to the report.

“Despite China putting a lot of investment into developing AI, the US currently holds 13 of 15 world-leading AI research centres,” GlobalData said. 

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“Furthermore, the US draws in talent from around the world, whereas China relies on its domestic supply,” it added.

In November, leading US chip maker NVIDIA warned investors of a forthcoming decline in sales following US export controls to China on high-end AI chips. 

The leading chip maker reported a major increase in profits in November, reporting sales in the past three months of $18.1bn, an increase of 206% on the same period last year. Profits also increased from $680m for the period last quarter to $9.8bn this quarter. 

The news followed the Biden administration’s calls for restrictions on overseas use of the most advanced US-made AI chips.

The overall AI market will be worth $909bn by 2030 having grown at a compound annual rate of 35% between 2022 and 2030, according to GlobalData research director Josep Bori.