From MIT's Technology Review, May 13:
How Big Tech, startups, AI devices, and trade wars will transform the way chips are made and the technologies they power.
Thanks
to the boom in artificial intelligence, the world of chips is on the
cusp of a huge tidal shift. There is heightened demand for chips that
can train AI models faster and ping them from devices like smartphones
and satellites,
enabling us to use these models without disclosing private data.
Governments, tech giants, and startups alike are racing to carve out
their slices of the growing semiconductor pie.
Here
are four trends to look for in the year ahead that will define what the
chips of the future will look like, who will make them, and which new
technologies they’ll unlock.
CHIPS Acts around the world
On the outskirts of Phoenix, two of the world’s largest chip manufacturers, TSMC and Intel, are racing to construct campuses in the desert that they hope will become the seats of American chipmaking prowess. One thing the efforts have in common is their funding: in March, President Joe Biden announced $8.5 billion in direct federal funds and $11 billion in loans for Intel’s expansions around the country. Weeks later, another $6.6 billion was announced for TSMC.
The awards are just a portion of the US subsidies pouring into the
chips industry via the $280 billion CHIPS and Science Act signed in
2022. The money means that any company with a foot in the semiconductor
ecosystem is analyzing how to restructure its supply chains to benefit
from the cash. While much of the money aims to boost American chip
manufacturing, there’s room for other players to apply, from equipment
makers to niche materials startups.
But
the US is not the only country trying to onshore some of the chipmaking
supply chain. Japan is spending $13 billion on its own equivalent to
the CHIPS Act, Europe will be spending more than $47 billion, and
earlier this year India announced
a $15 billion effort to build local chip plants. The roots of this
trend go all the way back to 2014, says Chris Miller, a professor at
Tufts University and author of Chip War: The Fight for the World’s Most Critical Technology. That’s when China started offering massive subsidies to its chipmakers.
“This created a dynamic in which other governments concluded they had
no choice but to offer incentives or see firms shift manufacturing to
China,” he says. That threat, coupled with the surge in AI, has led
Western governments to fund alternatives. In the next year, this might
have a snowball effect, with even more countries starting their own
programs for fear of being left behind.
The money is unlikely to
lead to brand-new chip competitors or fundamentally restructure who the
biggest chip players are, Miller says. Instead, it will mostly
incentivize dominant players like TSMC to establish roots in multiple
countries. But funding alone won’t be enough to do that quickly—TSMC’s
effort to build plants in Arizona has been mired
in missed deadlines and labor disputes, and Intel has similarly failed
to meet its promised deadlines. And it’s unclear whether, whenever the
plants do come online, their equipment and labor force will be capable
of the same level of advanced chipmaking that the companies maintain
abroad.
“The supply chain will only shift slowly, over years and decades,” Miller says. “But it is shifting.”
More AI on the edge
Currently, most of our interactions with AI models like ChatGPT are done via the cloud. That means that when you ask GPT to pick out an outfit (or to be your boyfriend), your request pings OpenAI’s servers, prompting the model housed there to process it and draw conclusions (known as “inference”) before a response is sent back to you. Relying on the cloud has some drawbacks: it requires internet access, for one, and it also means some of your data is shared with the model maker....
....MUCH MORE, including links to other posts in the Tech Review "What's next" in tech series.
