By Reuters | Updated: October 1, 2023

Sept 29 (Reuters) – (This Sept. 29 story has been corrected to add ‘alleged’ in the headline)

The European Union is examining alleged anticompetitive practices in chips used for artificial intelligence, a market that Nvidia (NVDA.O) dominates, Bloomberg News reported on Friday, citing people familiar with the matter.

The European Commission has been informally collecting views on potentially abusive practices in the sector for graphics processing units (GPU), used for AI work as well for gaming, to understand if there’s need for future intervention, the report said.

The early-stage investigation may never result in a formal probe or penalties, the report added.

Nvidia, which has a near-monopoly on the GPU market with its 80% market share, declined to comment, while the European Commission did not immediately respond to a Reuters’ request for comment.

French authorities have also been interviewing market players on Nvidia’s key role in AI chips, its price policy, the shortage of chips and its impact on prices, the report added.

France’s competition authority on Tuesday conducted a raid on a company in the “graphics cards sector”, which a person with direct knowledge of the matter told Reuters was Nvidia.

Nvidia’s stock and demand for its chips shot up after generative AI chatbot ChatGPT’s stellar rise last year.

The company’s chips are found in almost all systems globally that power applications like ChatGPT, the reason Nvidia is the only trillion-dollar semiconductor firm in the world.

© Thomson Reuters 2023

By Reuters | Updated: 28 September 2023

Sept 28 (Reuters) – China’s artificial intelligence (AI) chip startup Enflame, backed by tech giant Tencent, on Thursday said it raised 2 billion yuan ($273.68 million) from investors including funds linked to a government authority in Shanghai.

The deal came as the development of generative AI, boosted by the success of OpenAI’s ChatGPT, raises investor interest in companies working on AI-related infrastructure such as AI chips.

Enflame said the latest fundraising was co-led by investors including a few funds backed by Shanghai International Group, which is under the control of the state asset regulating authority in the municipality of Shanghai.

Tencent, which has cooperated with Enflame in developing an AI chip named Zixiao and contributed to the startup’s earlier fundraising, also participated in the latest investment round, according to a statement by Enflame.

(This story has been corrected to say that the company raised 2 bln yuan, not 20 bln, in the headline and paragraph 1)

($1 = 7.3078 Chinese yuan renminbi)

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By Reuters | Updated: 8 September 2023

US chip firm Nvidia and telecom-to-retail giant Reliance on Friday announced an AI partnership to create language models, generative apps and a cloud infrastructure platform for AI development in the South Asian nation.

Nvidia will provide the computing power required for the efforts, while Reliance unit Jio will manage and maintain the AI infrastructure and oversee customer engagement, the companies said.

“Reliance will create AI applications and services for their 450 million Jio (telecom) customers and provide energy-efficient AI infrastructure to scientists, developers and startups across India,” Nvidia said.

Mukesh Ambani, the billionaire chairman of Reliance, has previously talked up the need of “digital infrastructure in India that can handle AI’s immense computational demands”.

Nvidia globally has a near-monopoly on the computing systems used to power services like ChatGPT, OpenAI’s blockbuster generative AI chatbot. The AI powering such apps is known as a large language model because it takes in a text prompt and from that writes a human-like response.

The partnership will give Reliance access to the latest version of Nvidia’s Grace Hopper Superchip, its AI chips that are optimized to perform AI inference functions that effectively power apps like ChatGPT.

Reliance said the new AI infrastructure will speed up a range of India’s key AI projects, including chatbots, drug discovery, and climate research.

Neil Shah, a partner at Counterpoint Research, said the AI move is critical for Jio to “make sense” of the data it has from millions of users, and become a tech company providing services beyond telecom.

“The AI infra will enable it to provide accurate recommendations and cross sell products and services across its giant network of clients in retail, telecom, and financial space,” he said.

Reuters on Friday exclusively reported that oil-to-retail conglomerate Reliance is also considering a foray into chip manufacturing in India.

Separately, India’s Tata Group too is set to announce an AI partnership with Nvidia later during Friday, a source with direct knowledge of the matter told Reuters.

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By Reuters | Updated: 8 September 2023

Billionaire Mukesh Ambani’s Reliance Industries has begun exploring a foray into semiconductor manufacturing, a move that could address its supply chain needs and cater to growing chip demand in India, two people familiar with its strategy said.

The telecoms-to-energy conglomerate, encouraged by the Indian government, has held early-stage talks with foreign chipmakers that have the potential to become technology partners, said one of the people who has direct knowledge of the plans.

“There is intent, there is no timeline,” said the person, adding that Reliance has “yet to make a call on whether they want to ultimately invest.”

The names of the foreign chipmakers could not be immediately learned.

The sources were not authorised to speak to media and declined to be identified. Reliance, whose interest in making semiconductors has not been previously reported, did not respond to repeated requests for comment.

India’s IT ministry and Prime Minister Narendra Modi’s office also did not respond to requests for comment.

Modi has declared he wants his country to become a chipmaker for the world but those ambitions, first laid out in 2021, have suffered setbacks. The country does not as yet have any chip manufacturing plants, although India’s Vedanta and Taiwan’s Foxconn are both looking at building facilities.

Reliance sees merit in getting into semiconductors as the move would help safeguard against chip shortages that could affect its telecom and electronic devices businesses, the sources said. In 2021, for example, the conglomerate delayed the launch of a low-cost smartphone it was developing with Google citing the chip shortage.

Demand for semiconductors in India and globally is also increasing, they noted. India’s government has forecast the domestic chip market will be worth $80 billion (nearly Rs. 6,64,200 crore) by 2028 compared with $23 billion (nearly Rs. 1,90,960 crore) currently.

Reliance, which has a market capitalisation of around $200 billion (nearly Rs. 16,60,530 crore), would be one the best-positioned companies in India to delve into semiconductors, said Arun Mampazhy, a former India executive at US-based chipmaker GlobalFoundries.

“They also have deep pockets and know how to work with the government,” he said.

But chip manufacturing is an industry that has historically been beset with boom and bust cycles and requires much expertise.

“Getting a tech partner – as a joint venture, or via transfer of technology, is the make or break point” for Reliance, said Mampazhy.

Setbacks for India’s chip ambitions have come despite the government’s offer of $10 billion (nearly Rs. 83,030 crore) in incentives.

A $19.5 billion (nearly Rs. 1,61,930 crore) venture between Vedanta and Foxconn collapsed in July even before it got off the ground as the two sides struggled to find a tech partner, with Foxconn complaining that the project had not moved fast enough.

Foxconn has since decided to invest in India without Vedanta.

Plans by ISMC, a venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor, to invest $3 billion (nearly Rs. 24,900 crore) in India, have moved slowly after Intel sought to acquire Tower. Talks between Intel and Tower later collapsed.

Reliance has for months been considering an investment of $300 million (nearly Rs. 2,490 crore) that would give it a 30 percent stake in the venture, a third source with direct knowledge of discussions said.

Next Orbit Ventures and Tower did not respond to requests for comment.

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By Reuters | Updated: 1 September 2023

Dell Technologies raised its full-year forecast for revenue and profit on Thursday, as it benefited from the artificial intelligence (AI) boom and stabilizing demand for computer hardware and server products after a months-long slump. Shares of the Round Rock, Texas-based company rose 8 percent in extended trading. The results are the latest sign that a downturn in tech spending could be drawing to a close after major networking equipment provider Cisco also beat quarterly revenue estimates.

The company is expected to see a demand boost for its PowerEdge servers and generative AI designs with Nvidia from rising investments in artificial intelligence by Big Tech companies.

“AI is already showing it’s a long-term tailwind, with continued demand growth across our portfolio,” Chief Operating Officer Jeff Clarke said.

The company forecasted third-quarter revenue between $22.5 billion (roughly Rs. 1,86,025 crore) and $23.5 billion (roughly Rs. 1,94,251 crore) beating analysts’ estimates of $21.67 billion (roughly Rs. 1,79,129 crore), according to Refinitiv data. Dell expects earnings per share of $1.45 (roughly Rs. 120), plus or minus 10 cents compared with estimates of $1.38 (roughly Rs. 114).

For the full year, Dell now expects revenue between $89.5 billion (roughly Rs. 7,40,057 crore) and $91.5 billion (roughly Rs. 7,56,595 crore), and earnings per share of $6.30 (roughly Rs. 521), plus or minus 20 cents.

Dell reported second-quarter revenue and EPS above analyst estimates.

Servers and networking revenue for the second quarter came in at $4.27 billion (roughly Rs. 3,52,953 crore), up 11 percent from the first quarter, driven by higher demand for AI-optimized servers, Dell said.

Revenue at the company’s client solutions group (CSG) – home to its consumer and enterprise PC business – rose 8 percent from the first quarter to $12.94 billion (roughly Rs. 1,06,974 crore).

Gartner analyst Mikako Kitagawa said Dell keeping 7.5 percent of operating profits vs. revenue (CSG) is impressive in this challenging market environment illustrating the company’s “profitability first approach.”

The results are in sharp contrast with rival HP which cut its annual forecast due to a slump in PC demand and weakness in China.

© Thomson Reuters 2023

By Reuters | Updated: 31 August 2023

At least 32 international electronics companies have applied to India’s incentive programme to make laptops, tablets and servers in the country, a top minister said on Wednesday, weeks after the government announced restrictions on laptop imports.

Prime Minister Narendra Modi’s government is pushing to boost domestic manufacturing capacity under its “Make in India” initiative, with several global companies either setting up their own units or entering joint ventures with Indian firms.

The applications by the electronics companies were made under the country’s $2 billion (roughly Rs. 16,500 crore) production-linked incentive (PLI) programme for information technology hardware, announced in May, Information Technology Minister Ashwini Vaishnaw said.

Earlier this month, India said it would impose a licensing requirement for imports of laptops, tablets and personal computers, which was widely seen as a move to boost local production.

The companies that have applied to make laptops and other products in India include Hewlett Packard Enterprise, Dell Technologies, Asus, Acer and Lenovo, said Vaishnaw, according to a video feed from ANI news agency, in which Reuters has a minority stake.

The PLI scheme for IT hardware is expected to bring Rs. 24.3 billion of incremental investment and is likely to generate 75,000 direct jobs, the minister said.

India will provide a transition period of about three months before a new licensing regime for imports of laptops, tablets, and personal computers comes into effect, the country’s trade regulator said on August 5.

This is a partial reversal from a surprise decision on Thursday to impose the licensing requirement with immediate effect, which had prompted calls for a delay.

“Import consignments can be cleared till October 31 without a license and a government permit would be required for clearance of import from November 1,” the government said in a notification.