China’s leading internet giants are swiftly securing high-performance Nvidia chips crucial for developing generative artificial intelligence systems.
Orders totaling $5 billion have been placed for these chips, as reported by the Financial Times on Wednesday.
Companies such as Baidu, ByteDance (owner of TikTok), Tencent, and Alibaba have collectively made orders amounting to $1 billion to acquire approximately 100,000 A800 processors from Nvidia.
The deliveries for these orders are expected within this year. The same groups have also invested an additional $4 billion to acquire graphics processing units set to be delivered in 2024.
Nvidia’s spokesperson refrained from elaborating on the specifics of the report but acknowledged the substantial investments made by consumer internet companies and cloud providers in data center components. These investments are often made well in advance.
This move by Chinese companies follows a series of regulatory measures issued by the US government last October, aimed at curbing the progress of China’s semiconductor industry.
Concurrently, the US is allocating substantial subsidies to bolster its domestic chip industry.
Nvidia introduced the A800 processor in China to comply with export control regulations.
US authorities had requested the company to cease exporting its top two computing chips for AI-related endeavors to the country.
This development coincides with President Biden’s signing of an executive order targeting specific US investments in sensitive Chinese technology sectors.
The order also mandates government notification of funding in other tech domains.
Earlier in June, Nvidia’s finance chief had expressed concerns that restrictions on AI chip exports to China could result in a lasting loss of opportunities for the US industry.
Nonetheless, the company foresees no immediate significant impact.
Representatives from Baidu, ByteDance, Tencent, and Alibaba are yet to respond to requests for comments on the matter.
