logo
DeepSeek reportedly urged by Chinese authorities to train new model on Huawei hardware — after multiple failures, R2 training to switch back to Nvidia hardware while Ascend GPUs handle inference

DeepSeek reportedly urged by Chinese authorities to train new model on Huawei hardware — after multiple failures, R2 training to switch back to Nvidia hardware while Ascend GPUs handle inference

Yahoo21 hours ago
When you buy through links on our articles, Future and its syndication partners may earn a commission.
A new report claims that after successfully training its R1 model on Nvidia hardware, DeepSeek was urged by Chinese authorities to switch to using Huawei Ascend-based hardware for its next model. However, according to the Financial Times, training for R2 was met with persistent Huawei hardware failures, delaying the release of the model. DeepSeek was reportedly forced to switch back to Nvidia chips for training while using Huawei's for inference.
Following the success of R1, Chinese authorities allegedly encouraged DeepSeek to rely on Huawei's Ascend-based platforms instead of Nvidia for training, according to three individuals with knowledge of the matter cited by FT. DeepSeek followed that advice during R2's development, but the move quickly ran into a bunch of issues, including unstable performance, slower chip-to-chip connectivity, and limitations of Huawei's CANN software toolkit.
As a result, DeepSeek reverted to using Nvidia's AI accelerators for training the R2 model, while keeping Huawei's hardware for inference. On the one hand, this mixed approach was a compromise born out of necessity rather than preference. But on the other hand, given the shortage of Nvidia processors in China, it makes sense to ensure that a new AI model works on Huawei hardware, as many of DeepSeek's customers will use R2 on such platforms.
Huawei reportedly sent a team of engineers to DeepSeek's data centers to try to resolve the training problems. Despite their presence, the company has reportedly never managed a fully successful training run on the Ascend platform. Efforts continue to make the new model compatible with Ascend for inference purposes.
The inability to complete training on Ascend was a primary factor behind delaying the R2 launch from its planned May date, a source familiar with the project told FT. However, the shortage of high-performance Nvidia GPUs in China also affected the R2 schedule, according to a previous report. It is still unknown whether R2 has already been fully pre-trained.
DeepSeek reportedly trained its R1 model on a cluster of 50,000 Hopper-series GPUs — made up of 30,000 HGX H20 units, 10,000 H800s, and 10,000 H100s — that were supplied through its investor, High-Flyer Capital Management. For natural reasons, R2 will require a substantially more powerful cluster for training, so DeepSeek and its backer will have to land them somewhere (which may not be that hard, given plenty of AI data centers in China).There might be another issue, though. Reports indicate that DeepSeek's AI platform is tuned specifically for Nvidia hardware, which not only leaves the company vulnerable to the availability of Nvidia GPUs but also makes its clients depend on the supply of AI accelerators like Nvidia's HGX H20. To that end, it is crucial for DeepSeek to make R2 inference work on domestic hardware platforms, such as Huawei's Ascend.
Follow Tom's Hardware on Google News to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Nvidia Stock (NVDA) Weakens as Trump Says '14 Days' Until Chips Tariffs Hit
Nvidia Stock (NVDA) Weakens as Trump Says '14 Days' Until Chips Tariffs Hit

Business Insider

time22 minutes ago

  • Business Insider

Nvidia Stock (NVDA) Weakens as Trump Says '14 Days' Until Chips Tariffs Hit

Shares in semiconductor giants Nvidia (NVDA) and Advanced Micro Devices (AMD) were bashed today as President Trump said tariffs on chips were only a fortnight away. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Firing Line Speaking on board Air Force One as he made his way to a summit with Russia's President Putin over a potential end to the Ukraine war, Trump said chips and steel were next in the tariff firing line. 'I'll be setting tariffs next week and the week after on steel and on, I would say, chips,' Trump told reporters. He said the rates would be lower at the start to allow companies to build up domestic manufacturing in the U.S., rising sharply later, following a pattern he has also outlined for tariffs on pharmaceuticals. He did not reveal what rates of tariff he would impose. 'I'm going to have a rate that is going to be lower at the beginning – that gives them a chance to come in and build – and very high after a certain period of time,' he said. Trump added that he felt confident that companies would opt to manufacture in the United States, rather than face high tariffs. Trump in February raised tariffs on steel and aluminum to a flat 25%, but he announced in May that he would double the rate to 50% to boost domestic manufacturers. He also said that he was ready to impose a tariff of 100% on imports of semiconductors, but companies that committed to building up manufacturing in the United States would be exempt. Tariff Weight The tariff threat has been a big weight on semiconductor stocks this year particularly around April when concerns were – until now – at their highest. They have reacted by upping their U.S. manufacturing commitment. Nvidia has already announced plans within the next four years to produce up to half a trillion dollars of AI infrastructure in the United States through partnerships with the likes of TSMC (TSM) and Foxconn. It has also commissioned more than a million square feet of manufacturing space to build and test NVIDIA Blackwell chips in Arizona and AI supercomputers in Texas. Advanced Micro Devices CEO Lisa Su was also recently asked about incentives to bring chip manufacturing to the U.S. during an interview with Wired. In response, she said, 'We absolutely should bring manufacturing back to the US. Absolutely, 100 percent.' What Stocks are Most at Risk From Trump Tariffs? We have rounded up the stocks most at risk from Trump's tariffs using our TipRanks comparison tool.

Billionaire Investor George Soros Bets Big on Nvidia (NVDA)
Billionaire Investor George Soros Bets Big on Nvidia (NVDA)

Business Insider

time22 minutes ago

  • Business Insider

Billionaire Investor George Soros Bets Big on Nvidia (NVDA)

Billionaire investor George Soros has bet big on chipmaker Nvidia (NVDA) in recent months. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. The latest 13F regulatory filing of Soros Fund Management shows that the legendary investor boosted his stake in Nvidia considerably during this year's second quarter. Soros' holding of NVDA stock rose from 17,500 shares in this year's first quarter to 103,000 shares at the end of June. The current stake is valued at $18.5 million based on Nvidia's share price. However, Soros also holds bullish call options on NVDA stock, which are bets that the share price will rise. Add in the call options, and Soros' stake in Nvidia is up an astounding 1,600% from the first quarter. Nvidia is one of the biggest technology bets made by Soros Fund Management. Other Bets However, Nvidia wasn't the only tech bet made in Q2 by George Soros, who famously made $1 billion betting against the British currency in the early 1990s. The famed investor also loaded up on artificial intelligence (AI) infrastructure company Broadcom (AVGO), another chipmaker. Soros raised his holdings of AVGO stock to 37,000 shares from 11,000 shares previously. Soros Fund Management also added to its financial technology exposure through Fiserv (FI), increasing its stake to 31,000 shares from just 15,000 shares in Q1 of this year. Fiserv is a financial technology company that helps to facilitate transactions at banks. It is using AI in fraud detection and other areas of banking. Is NVDA Stock a Buy? The stock of Nvidia has a consensus Strong Buy rating among 38 Wall Street analysts. That rating is based on 35 Buy, two Hold, and one Sell recommendations issued in the past three months. The average NVDA price target of $191.26 implies 6.56% upside from current levels.

Veteran trader highlights crypto miner after Google deal
Veteran trader highlights crypto miner after Google deal

Miami Herald

time41 minutes ago

  • Miami Herald

Veteran trader highlights crypto miner after Google deal

TheStreet Pro's Stephen Guilfoyle knows what you're thinking. The veteran trader recently turned his attention to TeraWulf (WULF) , which saw its stock skyrocket on Aug. 14. Don't miss the move: Subscribe to TheStreet's free daily newsletter "Sarge, isn't Terawulf a cryptocurrency mining operation?" he wrote. "Yes, but that said, the firm is transitioning into something bigger and potentially far more consequential than that." Guilfoyle said TeraWulf has pivoted toward providing infrastructure to so-called hyperscalers, the large cloud service providers offering massive computing power and storage capacity, with a focus on AI-related workloads. "In short, the firm is likely trying to position itself as a competitor to CoreWeave (CRWV) ," he said, referring to the AI cloud-computing startup. Image source: East Bay Times via Getty Images Founded in 2021, TeraWulf said on its website that it provided "domestically produced bitcoin by using more than 90% zero carbon energy today." Guilfoyle, whose career dates back to the floor of the New York Stock Exchange in the 1980s, said Terawulf reached two 10-year agreements with AI cloud platform company Fluidstack to supply high-performance computing clusters to large cloud providers. Google parent Alphabet (GOOGL) has agreed to provide funding of $1.8 billion to help finance this project. In return, Alphabet received warrants to acquire roughly 41 million shares of TeraWulf that would amount to an 8% stake when exercised. More Experts Stocks & Markets Podcast: Sectors to Avoid With Jay WoodsTrader makes bold call with Boeing stock after defense workers strikeVeteran fund manager sends urgent 9-word message on stocks "These are truly a game changer for TeraWulf," Chief Financial Officer Patrick Fleury told analysts during the second-quarter earnings call. "The Fluid Stack lease and Google support agreement are carefully structured to enhance our credit profile and position us to scale quickly." TeraWulf's stock has surged 55.4% this year and skyrocketed 144% from this time in 2024. TeraWulf beat Wall Street's quarterly earnings expectations, with revenue increasing 34% year-over-year to $47.6 million. The company cited a higher average bitcoin price and expanded mining capacity, offset partly by expected headwinds from increased network difficulty and the April 2024 halving, where bitcoin reduced the block reward by 50%. "My target price is around $9.50," Guilfoyle said. "This is a trade, not an investment, and I expect to be flat the name by the closing bell should short-term traders take profits en masse on Friday." Clear Street analyst Brian Dobson raised the investment firm's price target on TeraWulf to $12 from $9 and affirmed a buy rating on the shares, according to The Fly. The colocation agreements with Fluidstack, supported by Google's $1.8 billion lease backstop and equity stake, and 80-year ground lease at the Cayuga site in New York, "materially enhance" TeraWulf's long-term growth profile, the analyst said. The firm upped its 2027 Ebitda estimate to reflect TeraWulf's expanding high performance computing portfolio. It sees potential upside to its outlook as it does not consider new business wins. Adding Fluidstack as a client, along with Google's commitment, "will create significant momentum and increase the likelihood of additional contract wins going forward," Dobson contended. Citizens JMP analyst Greg Miller raised the firm's price target on TeraWulf to $13 from $7 and maintained an outperform rating on the shares. Related: AI leader stuns Google with move that could reshape the internet TeraWulf reported solid Q2 results, underscoring progress in its strategic pivot toward high-performance computing hosting, the analyst said. The company is likely to exit mining by the next halving event, and it retains the flexibility to redeploy mining capacity toward HPC, aligning with customer demand trends, the firm says. Analysts have noted a shift from bitcoin mining to AI data centers, as both require huge amounts of electricity. A report by the International Energy Association said that electricity demand from data centers worldwide is set to more than double by 2030 to around 945 terawatt-hours, slightly more than the entire electricity consumption of Japan today. "Hyperscalers with generative AI needs are particularly interested in converting to bitcoin mining data centers due to the substantial power requirements and the urgency of deployment timelines," Prakash Vijayan, a senior analyst with Driehaus Capital Management, wrote in November. Vijayan said generative AI applications demand immense computational power and energy, often 10 times more than standard operations. "Bitcoin mining data centers are equipped with advanced cooling systems and have access to cheap, substantial energy sources," he said. "This presents an ideal solution for these needs." By repurposing existing bitcoin mining facilities, Vijayan said, hyperscalers can significantly reduce timelines and meet the growing demand for AI services more efficiently. "Given these trends, bitcoin miners are increasingly transitioning to AI data centers as a strategic move to diversify their revenue streams and leverage their existing infrastructure," he added. Related: The stock market is being led by a new group of winners The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store