Chinese Tech Giants Rush to Buy $5bn of Nvidia Chips for AI Systems

China's largest tech firms including Baidu, ByteDance, Tencent and Alibaba have ordered $5bn worth of advanced AI chips from Nvidia, allowing them to build powerful generative AI systems.

Credits: REUTERS

China's biggest internet companies are racing to get their hands on high-performance Nvidia chips that are vital for developing advanced artificial intelligence systems. Baidu, ByteDance, Tencent and Alibaba have ordered $1bn of Nvidia's A800 processors to be delivered this year, according to the Financial Times.

The Chinese tech giants also purchased a further $4bn of Nvidia graphics processing units for delivery in 2024, the FT reported, citing sources familiar with the matter. A Nvidia spokesperson would not elaborate specifically on the report, but said consumer tech firms invest billions annually in data center components, often ordering many months in advance.

Last October, the Biden administration issued sweeping export controls to limit China's semiconductor industry while boosting US chip subsidies. Nvidia now offers its A800 chip in China to comply with export rules, after US officials asked it to stop exporting top chips to China for AI uses.

The FT report comes as President Biden signed an order to prohibit certain US investments in sensitive tech in China and require notification of other tech funding.

Nvidia's CFO said in June that AI chip export restrictions to China would mean permanent lost opportunities for the US industry, though no immediate impact.

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• Chinese tech giants spending billions on advanced Nvidia AI chips

• Chips allow development of powerful generative AI systems

• Part of US-China chip rivalry and export control efforts

Source: REUTERS