Tencent’s president, Martin Lau, has assured investors that the Chinese tech giant has a “pretty strong stockpile of chips” to navigate the challenges posed by US chip sale restrictions. During an earnings call on Wednesday, Lau addressed concerns about how Tencent would manage under the new restrictions, describing the situation as “very dynamic” and stating that the company is working to “figure out the right solution” to maintain its AI strategy.
Lau explained that Tencent can rely on its existing stockpile of chips, acquired previously, to support its operations. These chips will be strategically deployed to projects that can “generate immediate returns,” such as the company’s advertising business. When it comes to training large language models, Lau noted that the company won’t need a large number of chips to improve performance due to advancements moving away from the scaling law that required continuous expansion of training clusters.
“Now we can see even with a smaller cluster, you can actually achieve very good training results,” Lau said. “There’s a lot of potential that we can get on the post-training side which do not necessarily need very large clusters.” He added, “So that actually helps us to look at our existing inventory of high-end chips and say we should have enough high-end chips to continue our training of models for a few more generations going forward.”
This development comes after Nvidia revealed last month that the Trump administration would impose new export licensing restrictions on chips being sold to China and other countries. Nvidia anticipated incurring a charge of up to $5.5 billion due to these restrictions. However, analysts suggest that the new restrictions may not significantly hinder China’s AI progress, as banning certain chips could simply give Chinese alternatives, like Huawei, a stronger market position.
