S. Korea Hopes To Enter The A.I Race As The Firm Rebellions Introduces A New Chip.

S. Korea hopes to enter the A.I. race as the firm Rebellions introduces a new chip.

To secure government contracts, the South Korean company Rebellions Inc. unveiled an artificial intelligence (A.I.) chip on Monday as Seoul looks to include local firms in the burgeoning A.I. market.

The ATOM chip is the most recent effort from South Korea to compete with industry leader Nvidia Corp in the hardware that enables the potentially game-changing AI technology. The fastest-growing consumer app in history, ChatGPT from Microsoft-backed OpenAI, which generates articles, essays, jokes, and even poetry, is the talk of the tech world, according to UBS. Several tech media have written about ChatGPT.

According to Mark Lipacis, chip analyst at Jefferies, Nvidia, a U.S. chip manufacturer, controls a sizable portion of high-end A.I. chips, accounting for around 86% of the computing capacity of the six most extensive cloud services in the world.

The South Korean government plans to spend more than $800 million on research and development over the following years to create a local industry and raise the market share of Korean A.I. chips in data centres from essentially zero to 80% by 2030.

It’s challenging to catch up to Nvidia, which is so far ahead in general-purpose A.I. chips, says Kim Yang-Paeng, senior researcher at the Korea Institute for Industrial Economics and Trade. However, it isn’t required because artificial intelligence processors can do many jobs and lack set parameters.

The ATOM from Rebellions is made to run a chatbot and computer vision applications well. According to Rebellions co-founder and CEO Park Sunghyun, the chip only uses 20% of the power of an Nvidia A100 chip on those operations since it focuses on limited jobs rather than doing an extensive range of them.

The most common processor for A.I. workloads is the A100, which is strong enough to develop, or as it is known in the trade, “train,” the A.I. models. The Samsung Electronics Co.-produced ATOM, created by Rebellions, does not provide training.

Despite having concrete plans to promote their semiconductor industries, nations like Taiwan, China, France, Germany, and the United States, the South Korean government is unusual in focusing its efforts on A.I. chips. Only local chipmakers will be given to submit bids for two data centres, or “neural processing unit farms,” that Seoul will announce this month.

THE TWISTING ARMS

Government officials want to develop a market that may serve as a proving ground for A.I. chipmakers in a nation where companies make half of the world’s memory chips to stimulate international competition.

According to Rebellions’ Park, a former engineer for Morgan Stanley, “the government is cajoling the data centres into using these chips.” He claimed that without such assistance, data centres and their clients would probably continue to use Nvidia chips.

According to the S.K. Telecom Co. subsidiary, Sapeon Korea Inc. also intends to participate in the project. FuriosaAI, supported by the state-run Korea Development Bank and South Korea’s leading search engine Naver Corp., told Reuters that it would also compete.

The advancements made by Nvidia are gaining a lot of momentum. According to Alan Priestley, an analyst at I.T. research firm Gartner, it will take time for these firms to gain traction. However, government incentives like those in Korea could impact the country’s market share.

Rebellions will attempt to join the government initiative in a partnership with KT Corp, a significant Korean telecom, cloud, and data centre operator, in the hopes of weaning clients away from the American supplier.

“Amid significant reliance on foreign GPUs (graphics processing units) globally, the cooperation between K.T. and Rebellions will allow us to establish an ‘A.I. full stack’ that spans software and hardware based on domestic technology,” said K.T. vice president Bae Han-chul.

For its A.I. chip business, Rebellions declined to provide a prognosis. It has raised 122 billion won ($96 million), of which 30 billion won came from K.T. as part of an investment round with Temasek Pavilion Capital of Singapore, and 10 billion won came from a grant from the South Korean government.

Different fronts for conflict

Most low-value, basic chip packing processes were transferred from the U.S. to foreign companies, primarily in Asia. At these factories, chips are put into protective frames, inspected, and then sent to electronics makers.

However, new frontlines are being drawn in the race to develop cutting-edge packaging methods, which involve combining various chips with distinct functionalities into a single package to improve overall capabilities and contain the increase in chip cost.

The White House stated in a study from 2021 that “China’s huge investments in sophisticated packaging threaten to upend the industry in the future,” even though the United States and its partners have advanced packaging capabilities.

According to the report, a SMIC official suggested last year that Chinese companies should concentrate on innovative packaging to make up for their limitations in producing more complex chips. SMIC is the largest chipmaker in China and was added to a U.S. trade blocklist in 2020.

The SK Group’s action follows this week’s CHIPS Act, which offers $52 billion in subsidies for chip manufacturing and research and a projected $24 billion in investment tax credits for chip plants. The sources claimed that the chip packaging plant and the R&D facilities would also be eligible for the money.

Taiwan Semiconductor Manufacturing Co., Samsung Electronics, and Intel are just a few U.S. chipmakers that have recently announced expansion ambitions.

Edited by Prakriti Arora