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Chip challengers try to break Nvidia’s grip on AI market

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Chip challengers try to break Nvidia’s grip on AI market

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Nvidia’s rivals are mobilising in an effort to break the company’s stranglehold on the AI chip market, raising hundreds of millions of dollars and rolling out new products as they look to share the spoils of a boom in artificial intelligence technology.

Cerebras, d-Matrix and Groq are among a group of smaller companies aiming to take a slice of the multibillion-dollar AI chip market from Nvidia, which has so far dominated the first wave of investment with its graphics processing units, or GPUs.

They are riding a wave of expectation that demand for artificial intelligence “inference” — the compute power needed for models such as OpenAI’s ChatGPT and Google’s Gemini to generate responses to queries — will grow exponentially as chatbots and other generative AI applications become more popular.

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Nvidia’s Hopper GPUs, which are well suited to the highly resource-intensive task of training top AI models, have become one of the world’s hottest commodities.

Cerebras, d-Matrix and Groq are focusing instead on cheaper, more specialised chips designed for running AI models.

On Tuesday Cerebras announced its new “Cerebras Inference” platform, based on its CS-3 chip, which is the size of a dinner plate. Cerebras claims its solution is 20 times faster than Nvidia’s current generation of Hopper chips at AI inference, at a fraction of the price. Cerebras cites tests run by benchmarking analysis provider Artificial Analysis.

“The way you beat the 800lb gorilla is by bringing a vastly better product to market,” Cerebras chief executive Andrew Feldman told the Financial Times. “In my experience, better products usually win, and we’ve taken meaningful customers from [Nvidia].”

The CS-3 chip shuns the use of a separate high-bandwidth memory chip, which is used by Nvidia. Instead it offers an alternative architecture with memory built directly into the chip wafer.

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Limitations on memory bandwidth, Feldman said, are a fundamental constraint on the inference speed of an AI chip. The combination of logic and memory into a single large chip delivers results that are “orders of magnitude faster”, he said.

d-Matrix, founded by Sid Sheth in 2019, is also kicking off a new funding round less than a year after it raised $110mn in a series B funding round led by Singapore’s state-owned fund Temasek. The company is aiming to raise $200mn or more later this year or early next, according to Sheth. d-Matrix is early in the fundraising process and said the ultimate figure raised could change.

d-Matrix is planning a full-scale launch of its own chip platform, Corsair, at the end of this year. Sheth said the company was pairing its products with open software such as Triton, which competes with Nvidia’s Cuda, a widely used software platform that offers the tools for developers to build AI applications and optimises the performance of its chips.

Nvidia’s biggest customers are backing the use of open software such as Triton. “App developers don’t like to be held to one particular tool,” Sheth said, and “people are getting wise that Nvidia has a stranglehold with Cuda on the training side”.

Groq, another AI inference competitor led by a former founding member of Google’s tensor processing unit team, raised $640mn this month from investors led by BlackRock Private Equity Partners, at a valuation of $2.8bn.

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One venture capitalist cautioned that despite the hype around the sector, semiconductor start-ups had had a challenging time breaking into the market.

Chipmaker Graphcore was bought by SoftBank last month for just above $600mn, less than the roughly $700mn that the company had raised in venture capital since it was founded in 2016, according to people familiar with the deal.

Groq and Cerebras were also founded in 2016. “There has been a near insatiable desire from public investors to find and back the next Nvidia,” said Peter Hébert, co-founder and managing partner at venture firm Lux Capital. “This isn’t just about chasing the latest trend. The momentum is also benefiting several VC-funded chip start-ups that have been toiling away for nearly a decade.”

Video: AI: a blessing or curse for humanity? | FT Tech

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U.S. Army private who fled to North Korea will plead guilty to desertion, lawyer says

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U.S. Army private who fled to North Korea will plead guilty to desertion, lawyer says

A television screen shows a file image of Pvt. Travis King during a news program at the Seoul Railway Station in Seoul, South Korea, on Aug. 16, 2023.

Ahn Young-joon/AP


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WASHINGTON — An Army private who fled to North Korea just over a year ago will plead guilty to desertion and four other charges and take responsibility for his conduct, his lawyer said Monday.

Travis King’s attorney, Franklin D. Rosenblatt, told The Associated Press that King intends to admit guilt to a total of five military offenses, including desertion and assaulting an officer. Nine other offenses, including possession of sexual images of a child, will be withdrawn and dismissed under the terms of the deal.

King will be given an opportunity at a Sept. 20 hearing at Fort Bliss, Texas, to discuss his actions and explain what he did.

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“He wants to take responsibility for the things that he did,” Rosenblatt said.

In a separate statement, he added, “Travis is grateful to his friends and family who have supported him, and to all outside his circle who did not pre-judge his case based on the initial allegations.”

He declined to comment on a possible sentence that his client might face. Desertion is a serious charge and can result in imprisonment.

The AP reported last month that the two sides were in plea talks.

King bolted across the heavily fortified border from South Korea in July 2023, and became the first American detained in North Korea in nearly five years.

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His run into North Korea came soon after he was released from a South Korean prison where he had served nearly two months on assault charges.

About a week after his release from the prison, military officers took him to the airport so he could return to Fort Bliss to face disciplinary action. He was escorted as far as customs, but instead of getting on the plane, he joined a civilian tour of the Korean border village of Panmunjom. He then ran across the border, which is lined with guards and often crowded with tourists.

He was detained by North Korea, but after about two months, Pyongyang abruptly announced that it would expel him. On Sept. 28, he was flown back to Texas, and has been in custody there.

The U.S. military in October filed a series of charges against King under the Uniform Code of Military Justice, including desertion, as well as kicking and punching other officers, unlawfully possessing alcohol, making a false statement and possessing a video of a child engaged in sexual activity. Those allegations date back to July 10, the same day he was released from the prison.

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Chinese retailer PDD takes $55bn share hit after warning of ‘inevitable’ profit decline

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Chinese retailer PDD takes bn share hit after warning of ‘inevitable’ profit decline

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PDD Holdings, the owner of ecommerce apps Pinduoduo and Temu, has warned of an “inevitable” decline in profitability, leading shares to fall 29 per cent in New York.

The warning comes as PDD’s ecommerce apps face rising competition in China and around the world, and as the tech sector has to tread a careful line in Beijing, where authorities are prioritising high-end manufacturing.

In an hour-long call with investors and Wall Street analysts on Monday in New York, PDD’s executives said they were “committed to high-quality development”, parroting Beijing’s current policy priority.

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The company’s management said it would spend Rmb10bn ($1.4bn) in the first year of a new programme to lower fees for “high-quality merchants” and “focus on creating a healthy and sustainable platform ecosystem”.

The share price plunge wiped $55bn off PDD Holdings’ market value. Investors continued to ditch their shares during the hour-long briefing after the release of financial results for the second quarter ending in June.

In recent years, Chinese authorities have carried out a crackdown on the country’s tech giants, and merchants recently protested over mistreatment at a PDD office in southern China.

Co-chief executive Zhao Jiazhen said while profits might fluctuate in the near term, “in the long run the decline in our profitability is inevitable”.

Co-chief executive Chen Lei added that it was “not an appropriate time” to pay dividends or buy back shares and that “in the foreseeable years ahead, we also do not see such a need”.

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PDD reported Rmb32bn in quarterly net profit, up 144 per cent year on year, and a cash balance of Rmb285bn. Most of its Chinese tech peers have begun using their ample cash to reward shareholders with capital return programmes.

The ecommerce giant also warned of rising competition. At home, it faces a renewed push by reigning giant Alibaba to win back market share. Abroad, Amazon has launched a new discount programme.

The company’s revenue of Rmb97bn missed analyst expectations, though it was up 86 per cent over the past year.

PDD Holdings faced a major public relations crisis in July when hundreds of Temu merchants descended on its Guangzhou offices to protest heavy fines and penalties levied by the company as punishment for customer returns, resulting in a swarm of police descending on the area.

The blunt messaging by PDD executives on Monday produced headlines more favourable to its standing in Beijing.

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PDD is “investing billions to support new quality merchants, continuously helping merchants improve quality and efficiency”, read one headline on the official news agency Xinhua.

The company’s tumbling share price came with one silver lining for founder Colin Huang, who in recent weeks had topped China’s rich list, a spot that comes with unwanted attention in Xi Jinping’s “common prosperity” era.

In 2020, Huang gave away billions of dollars’ worth of PDD shares to charity and to other PDD executives as his name climbed to the forefront of the country’s wealthy ranks. People familiar with his thinking at the time said the move was in part driven by his desire to maintain a lower profile.

By the end of day on Monday, Huang had fallen to become the fourth richest Chinese person, according to a Bloomberg list.

Additional reporting by Tina Hu in Beijing

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Video: The rise of Pinduoduo and Temu: profits and secrets | FT Film
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Judge orders pause on Biden program offering legal status to spouses of U.S. citizens

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Judge orders pause on Biden program offering legal status to spouses of U.S. citizens

President Joe Biden speaks during an event with the National Governors Association in the East Room of the White House in February.

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McALLEN, Texas (AP) — A federal judge in Texas on Monday paused a Biden administration policy that would give spouses of U.S. citizens legal status without having to first leave the country, dealing at least a temporary setback to one of the biggest presidential actions to ease a path to citizenship in years.

The administrative stay issued by U.S. District Judge J. Campbell Barker comes just days after 16 states, led by Republican attorneys general, challenged the program that could benefit an estimated 500,000 immigrants in the country, plus about 50,000 of their children. The states accused the administration of bypassing Congress for “blatant political purposes.”

One of the states leading the challenge is Texas, which in the lawsuit claimed the state has had to pay tens of millions of dollars annually from health care to law enforcement because of immigrants living in the state without legal status.

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President Joe Biden announced the program in June. The court order, which lasts for two weeks but could be extended, comes one week after the Department of Homeland Security began accepting applications.

“The claims are substantial and warrant closer consideration than the court has been able to afford to date,” Barker wrote.

Barker was appointed by former President Donald Trump in 2019 as a judge in Tyler, Texas, which lies in the 5th U.S. Circuit Court of Appeals, a favored venue for advocates pushing conservative arguments.

The judge laid out a timetable that could produce a decision shortly before the presidential election Nov. 5 or before a newly elected president takes office in January. Barker gave both sides until Oct. 10 to file briefs in the case.

The policy offers spouses of U.S. citizens without legal status, who meet certain criteria, a path to citizenship by applying for a green card and staying in the U.S. while undergoing the process. Traditionally, the process could include a years-long wait outside of the U.S., causing what advocates equate to “family separation.”

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The Department of Homeland Security did not immediately return an email seeking comment on the order.

“The court’s decision tonight to halt the federal government from providing relief is devastating to the thousands of Texas families that could have benefited from this program,” Jessica Cisneros, an attorney for the advocacy organization the Texas Immigration Law Council, said Monday.

Several families were notified of the receipt of their applications, according to attorneys advocating for eligible families who filed a motion to intervene earlier Monday.

“Texas should not be able to decide the fate of hundreds of thousands of U.S. citizens and their immigrant spouses without confronting their reality,” Karen Tumlin, the founder and director of Justice Action Center, said during the press conference before the order was issued.

The program has been particularly contentious in an election year where immigration is one of the biggest issues, with many Republicans attacking the policy and contending it is essentially a form of amnesty for people who broke the law.

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Republican Texas Attorney General Ken Paxton cheered the order.

“This is just the first step. We are going to keep fighting for Texas, our country, and the rule of law,” Paxton posted on the social media platform X.

To be eligible for the program, immigrants must have lived continuously in the U.S. for at least 10 years, not pose a security threat or have a disqualifying criminal history, and have been married to a citizen by June 17 — the day before the program was announced.

They must pay a $580 fee to apply and fill out a lengthy application, including an explanation of why they deserve humanitarian parole and a long list of supporting documents proving how long they have been in the country.

If approved, applicants have three years to seek permanent residency. During that period, they can get work authorization.

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Before this program, it was complicated for people who were in the U.S. illegally to get a green card after marrying an American citizen. They can be required to return to their home country — often for years — and they always face the risk they may not be allowed back in.

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