On Wednesday, Chinese tech giant Baidu said, it has started mass-producing its second-generation Kunlun artificial intelligence (AI) chips, as it races to become a major player in the chip industry with Beijing’s backing.

In a statement Baidu said, the second-generation Kunlun AI chips, using 7 nm process technology, produced computational speeds of two-to-three times faster than the previous generation.

Baidu’s first-generation Kunlun chips, which began production in early 2020, were mostly used by Baidu in electric vehicles and in cloud computing.

China is prepping its domestic state-backed companies to design their own chips in order to reduce the dependence on foreign producers including Nvidia Corp and Qualcomm Inc.

The United States has imposed sanctions on Huawei Technologies Co Ltd which has hammered the Chinese telecom giant’s revenues.

Baidu is weighing options with regard to its AI chip design capabilities, with the aim of making the Kunlun unit a standalone business.

Earlier this year in March, Kunlun completed its first fundraising round which valued it at around $2 billion.

Baidu also operates another chip unit called Honghu.