Chinese Tech Giants Order Billions in Nvidia Chips Amidst Curbs
ByteDance, Alibaba, and Tencent have placed orders for over 3 million of Nvidia's new RTX PRO 5500 graphics cards. Their collective value exceeds USD 35 billion amidst US trade restrictions with China, according to Reuters.
Nvidia, the US based chipmaker, advised customers it cannot guarantee fulfilling substantial orders, as Chinese technology firm demand significantly outstrips planned production. Anonymous sources confirmed this. The RTX PRO 5500 is a workstation chip, suitable for professional computers, not large data centre clusters requiring Nvidia's advanced artificial intelligence processors. However, it remains among the most powerful Nvidia chips obtainable for Chinese buyers.
And US export controls prohibit sales of Nvidia's Blackwell based B300 data centre chip to Chinese buyers; Hopper based H200 chip exports are individually reviewed. These regulatory hurdles compel Chinese Big Tech to seek alternatives. One source indicated Nvidia told partners they might receive only five to ten percent of requested quantities. Another suggested global production of the RTX PRO 5500 would not exceed 3 million units by 2027. Total orders from Chinese customers, however, already surpass 6 million units, two sources confirmed.
The three major Chinese tech firms ordered cards priced at approximately USD 11,400 each, for a potential combined value exceeding USD 35 billion. This scale of previously unreported orders demonstrates sustained Chinese organisational interest in Nvidia hardware despite US imposed limitations. Nvidia Chief Executive Jensen Huang stated US restrictions reduced Nvidia's share of China's artificial intelligence data centre chip market from near monopoly to effectively nothing.
But persistent demand for the RTX PRO 5500 suggests Nvidia maintains a considerable potential market through accessible, less powerful products. This surge also highlights how US restrictions tightened computing power supplies within China, the world's second largest economy. Chinese companies are actively developing cutting edge AI models, supporting Beijing's efforts to deploy this technology across various industries. Washington's curbs directed Chinese firms towards domestic suppliers. Beijing encourages homegrown chips, leading to Huawei increasing its market share.
However, Chinese chipmakers struggle to rival leading American products, partly due to restrictions limiting access to foreign equipment for advanced semiconductors. An Nvidia spokesperson observed "unprecedented growth since 2022" for Chinese workstation chip and card producers, noting US firms face restrictions from outdated US export controls and China's own limits on US imports. ByteDance, Alibaba, and Tencent offered no comment, nor did relevant US or Chinese government departments.
And the RTX PRO 5500 is less powerful than Nvidia's H200 and B300 chips. Chinese companies plan to use the RTX PRO 5500 for AI inference, generating chatbot responses, a task requiring less computing power than training models. Reuters reviewed product specifications showing the RTX PRO 5500's performance comparable to the RTX 6000D. Initially, major Chinese tech firms found the RTX 6000D overly expensive and hoped for more powerful Nvidia processors, but these expectations have faded due to enduring restrictions and scarce AI computing capacity, making the RTX PRO 5500 a more appealing substitute, two sources indicated.
Nvidia's inability to guarantee full deliveries reflects both a surge in demand and its manufacturing priorities. From 2027, Nvidia plans to allocate much of its capacity at Taiwan Semiconductor Manufacturing Co to Rubin, its next generation platform for large scale data centres, diverting resources from products like the RTX PRO 5500. TSMC declined to comment. Nvidia advised customers to expect early samples towards the end of the year, with commercial deliveries planned for early 2027.
So, the RTX 6000D has since been discontinued, its market price in China doubling, one source added. A filing by Shenzhen listed fintech and AI computing services company Tansun Technology indicated an agreement to acquire 20,000 RTX PRO 5500 cards from an unnamed counterparty. Tansun Technology cautioned supply shortages, industry demand, and overseas technology controls could delay deliveries or reduce volumes.
Chinese Big Tech firms ByteDance, Alibaba, and Tencent ordered over 3 million Nvidia RTX PRO 5500 graphics cards.
The orders collectively exceed USD 35 billion, driven by US export controls on more powerful chips.
Nvidia cannot guarantee fulfilling the demand, with global production limited and Chinese orders far exceeding supply.
The RTX PRO 5500, a workstation chip, is used for AI inference, a less demanding task than AI model training.
US restrictions have tightened computing power supplies in China, pushing firms towards domestic suppliers like Huawei.
Source: Reuters
