As startup Rebellions introduces a new semiconductor, South Korea hopes to enter the AI competition.

Rebellions Inc., a South Korean startup, unveiled an artificial intelligence (AI) chip on Monday as it competed for government contracts and Seoul sought a role for homegrown firms in the burgeoning AI sector.

The firm’s ATOM chip is the most recent Korean effort to take on market leader Nvidia Corp. (NVDA.O) in the hardware that drives the potentially ground-breaking AI technology.

ChatGPT, a chatbot from Microsoft-backed (MSFT.O) OpenAI that generates articles, essays, jokes, and even poetry, is the fastest-growing consumer app in history just two months after launch, according to UBS. AI is the hot topic in the tech industry.

According to Jefferies chip analyst Mark Lipacis, the US chip manufacturer Nvidia controls a sizable portion of high-end AI chips, accounting for around 86% of the computational capacity of the six largest cloud services in the world as of December.

In an effort to increase the market share of Korean AI chips in domestic data centres from practically zero to 80% by 2030, the South Korean government is investing more than $800 million over the next five years for research and development.

Nvidia is well ahead in general-purpose AI chips, so it’s challenging to catch up, according to Kim Yang-Paeng, senior researcher at the Korea Institute for Industrial Economics and Trade. However, since AI chips can do a variety of tasks and there are no predetermined limits or measurements, nothing is set in stone.

The ATOM from Rebellions is made to be extremely effective at running chatbot and machine vision applications. According to Park Sunghyun, co-founder and CEO of Rebellions, the chip uses only 20% of the power of an Nvidia A100 chip on certain operations since it focuses on a narrow range of jobs rather than doing a large variety of them.

The most well-liked chip for AI workloads is the A100, which is potent enough to “train” (or, in business parlance, “build”) the AI models. The Samsung Electronics Co. (005930.KS)-produced ATOM, which was created by Rebellions, does not provide training.

While Taiwan, China, France, Germany, the United States, and other nations have comprehensive plans to help their semiconductor industries, the South Korean government is unusual in focusing its efforts on AI chips.

Only local chipmakers will be allowed to submit bids for the two data centres, or “neural processing unit farms,” that Seoul will advertise this month, a Ministry of Science and ICT official told Reuters.

In “Twisting Arms,”

The government of a nation whose businesses provide half the world’s memory chips wants to develop a market that can serve as a testing ground for AI chipmakers in an effort to stimulate international competition.

According to Rebellions’ Park, a former Morgan Stanley engineer who spoke to Reuters, the government is pressuring data centres to use specific chips.

Without it, he claimed, data centres and their clients would probably continue using Nvidia chips.

The project will also include Sapeon Korea Inc., according to the subsidiary of SK Telecom Co. (017670.KS).

South Korea’s largest search engine, Naver Corp (035420.KS), and the government-run Korea Development Bank (KDB.UL), have supported FuriosaAI, which has informed Reuters that it would also compete.

“Nvidia’s advancements are gaining a lot of momentum.” It will take time for these firms to gain traction, according to Alan Priestley, an analyst at IT research firm Gartner. But government incentives like those taking place in Korea could have an impact on the market share there.

In an effort to wean Nvidia clients away from the American supplier, rebels will look to join the government initiative in a cooperation with KT Corp (030200.KS), a significant Korean telecom, cloud, and data centre provider.

The collaboration between KT and Rebellions will enable us to have an “AI full stack” that includes software and hardware based on local technology, according to KT vice president Bae Han-chul. ” Amid excessive dependence on foreign GPUs (graphics processing units) internationally,

Rebellions is refusing to provide a forecast for its AI chip business. It has raised 122 billion won ($96 million), including 10 billion won in a grant from the South Korean government and 30 billion won from KT in an investment round with Temasek Pavilion Capital of Singapore.

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