China’s prominent internet giants are swiftly securing high-performance Nvidia chips, a critical component for building advanced generative artificial intelligence systems. According to the Financial Times, these companies, including Baidu, ByteDance (owner of TikTok), Tencent, and Alibaba, have collectively placed orders worth $5 billion.
The orders consist of a $1 billion investment in acquiring approximately 100,000 A800 processors from Nvidia, scheduled for delivery within the current year. Moreover, these Chinese conglomerates have committed to purchasing an additional $4 billion worth of graphics processing units (GPUs) with delivery expected in 2024. These moves underline China’s strong focus on bolstering its AI capabilities.
A spokesperson from Nvidia refrained from commenting directly on the report but acknowledged that “consumer internet companies and cloud providers invest billions of dollars on data center components every year, often placing orders many months in advance.”
To meet export control regulations, Nvidia introduced the A800 processor in China, responding to a request from U.S. officials to halt the export of its top two computing chips to the country for AI-related projects. This adaptation aligns with the complex geopolitical landscape influencing technology trade.
The Financial Times report coincides with President Biden’s executive order signed recently, which aims to restrict specific U.S. investments in sensitive Chinese technology sectors and necessitates government notification for funding in various tech domains.
In June, Nvidia’s finance chief highlighted the potential long-term ramifications of restricting AI chip exports to China, suggesting that such limitations could lead to a permanent loss of opportunities for the U.S. tech industry. Nonetheless, the company anticipated no immediate substantial impact from these restrictions.
As of now, Baidu, ByteDance, Tencent, and Alibaba have not provided immediate responses to inquiries from Reuters.
