HONG KONG, Nov 15 Reuters Chinese technology giant Tencent Holdings on Wednesday said it has a large stockpile of AI chips from U.S. maker Nvidia, but that broadened U.S. restrictions on highend chip sales to China will eventually impact its cloud services.

President Martin Lau, on an analyst call following Tencent39;s thirdquarter earnings report, said the U.S. decision last month to ban the export to China of more chips used in artificial intelligence AI will force the firm to use existing stock more efficiently and seek domestically produced alternatives.

Tencent has enough Nvidia chips to continue development of its Hunyuan AI model for at least a couple more generations, so the curbs will not affect nearterm AI capability, Lau said.

We will have to figure out ways to make the usage of our AI chips more efficient, he said. And we will also try to look for domestic sources for these training chips.

The new rules, however, will impact cloud services where Tencent sells computing power to clients.

We feel that the chip ban does actually affect our ability to resell use of these AI chips through our cloud services, he said.

Nvidia dominates about 90 of the Chinese AI chip market, meaning expanding U.S. export restrictions have left Chinese firms with AI ambitions scrambling to cope. Some have turned to domestic chipmakers such as Huawei Technologies HWT.UL, in a trend analysts have called a threat to Nvidia39;s lead.

Reuters reported last week that Tencent…