UK and Saudi Governments Scramble to Secure AI GPU Supply

Governments around the world are scrambling to sure up supplies of graphics processing units (GPUs) needed for AI development and processing.

With the most sought-after chips in short supply, countries including the United Kingdom, Saudi Arabia are expending serious financial and diplomatic resources to secure enough GPUs for their domestic AI sectors.

Middle Eastern Governments Spend Big on Prized Nvidia Chips

According to a report this week in the Financial Times, Saudi Arabia has bought at least 3,000 of Nvidia’s H100 chips for the King Abdullah University of Science and Technology with the intention of building a new supercomputer

The report states that the UAE has also invested in thousands of Nvidia chips via state-owned businesses.

In those countries, governments are investing heavily to help advance AI research and foster innovation. And they need to. At $40,000 a piece, H100s don’t come cheap. But they have become nearly essential in the world of advanced AI development.

Few technology companies have the resources needed to train large AI models like OpenAI’s GPT-4. Due to their high processing power, the expensive Nvidia chips are highly prized for such tasks. And the GPU maker has emerged as a key player in the contemporary AI boom. Yet even so, OpenAI’s supercomputer contains 10,000 A100s, a predecessor to the H100.

UK’s AI Sector to Benefit From £100 Boost to GPU Supply

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In a bid to bulk out the UK’s AI capacity, it was reported on Sunday, August 20, that Prime Minister Rishi Sunak has committed £100 million of public money to order key components from Nvidia, AMD, and Intel. 

The report notes that the government is also in the advanced stages of securing GPUs from Nvidia.

In the long run, however, the challenge of maintaining a technological edge is far more complex and dynamic. For countries like the UK, stockpiling GPUs is only a temporary fix to ongoing challenges.

Building Domestic Manufacturing Capacity

Part of the reason graphics cards are so expensive is that the entire GPU supply chain is throttled by the manufacturing capacity of chip-makers in Taiwan. 

Commenting on tensions between Taiwan and China, the CEO of Nvidia has said he feels “perfectly safe” about relying so much on the supplies from the chip powerhouse. But governments around the world have flagged the issue as a national security concern. And many see domestic bolstering their domestic manufacturing capacity as key to maintaining a secure chip supply.

For example, the UK government has published a national semiconductor strategy. Over the next ten years, the plan will see a billion pounds invested in the country’s chip manufacturing sector. However, that figure is dwarfed by subsidies in the EU and US, which have pledged $52 billion and €43, respectively, to support semiconductor manufacturing.