China’s major internet giants are engaging in a rapid acquisition spree of high-performance Nvidia chips, which are crucial for the development of generative artificial intelligence systems. According to a report from the Financial Times, these companies have collectively placed orders amounting to US$5 billion (equivalent to $7.65 billion) for Nvidia chips.
Baidu, ByteDance (the parent company of TikTok), Tencent, and Alibaba are reported to have initiated orders worth US$1 billion, aiming to secure around 100,000 A800 processors from the US-based chip manufacturer. These orders are anticipated to be fulfilled within the current year, as indicated by sources familiar with the situation.
Additionally, these Chinese tech giants have committed to further purchases, with an estimated value of US$4 billion, for graphics processing units scheduled for delivery in 2024, according to the same report.
Nvidia has introduced the A800 processor to the Chinese market in compliance with export control regulations. This strategic move followed a request from US officials in the previous year to halt the export of their top two computing chips for AI-related purposes to China.
The release of the FT report coincides with a recent development: US President Joe Biden’s signing of an executive order designed to narrowly restrict specific US investments in sensitive technology sectors within China. This order also mandates government notification for funding activities in other technology domains.
