Chinese Tech Firms Baidu, TikTok-owner ByteDance, Tencent, Alibaba Order Nvidia AI Chips Worth $5 Billion: Report

The Chinese firms have made orders worth $1 billion to acquire about 100,000 A800 processors from the US chipmaker to be delivered this year.

By Reuters | Updated: 10 August 2023 10:56 IST

Chinese Tech Firms Baidu, TikTok-owner ByteDance, Tencent, Alibaba Order Nvidia AI Chips Worth $5 Billion: Report

Photo Credit: Reuters

Nvidia offers the A800 processor in China to meet export control rules

Highlights

The firms had ordered $4 billion worth of units to be delivered in 2024
New executive order will prohibit certain US investments in China tech
Restrictions on exports of AI chips to China may cause US tech loss

China's internet giants are rushing to acquire high-performance Nvidia chips vital for building generative artificial intelligence systems, making orders worth $5 billion (roughly Rs. 41,400 crore), the Financial Times reported on Wednesday.

Baidu, TikTok-owner ByteDance, Tencent and Alibaba have made orders worth $1 billion (roughly Rs. 8,300 crore) to acquire about 100,000 A800 processors from the US chipmaker to be delivered this year, the FT reported, citing multiple people familiar with the matter.

The Chinese groups had also purchased a further $4 billion (roughly Rs. 33,100 crore) worth of graphics processing units to be delivered in 2024, according to the report.

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An Nvidia spokesperson would not elaborate on the report but said that "consumer internet companies and cloud providers invest billions of dollars on data centre components every year, often placing orders many months in advance."

The Biden administration last October issued a sweeping set of rules designed to freeze China's semiconductor industry in place while the US pours billions of dollars in subsidies into its chip industry.

Nvidia offers the A800 processor in China to meet export control rules after US officials asked the company to stop exporting its two top computing chips to the country for AI-related work.

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The FT report comes as President Biden on Wednesday signed an executive order that would narrowly prohibit certain US investments in sensitive technology in China and require government notification of funding in other tech sectors.

Nvidia's finance chief said in June that restrictions on exports of AI chips to China "would result in a permanent loss of opportunities for the US industry", though the company expected no immediate material impact.

Baidu, ByteDance, Tencent and Alibaba did not immediately respond to Reuters' requests for comment.

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© Thomson Reuters 2023

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