China’s internet giants, including Baidu, ByteDance, Tencent, and Alibaba, are placing orders worth $5 billion for high-performance Nvidia chips essential for building artificial intelligence (AI) systems, according to a report in the Financial Times. The orders include the acquisition of approximately 100,000 A800 processors from the US chipmaker, to be delivered this year, and an additional $4 billion worth of graphics processing units scheduled for delivery in 2024. These purchases highlight the urgency of Chinese companies to secure Nvidia chips amidst restrictions imposed by the Biden administration to safeguard the US semiconductor industry.
The export control rules implemented last October have led Nvidia to offer the A800 processor in China to remain compliant, after being requested by US officials to halt exports of its top computing chips specifically for AI-related purposes. This news follows President Joe Biden’s signing of an executive order on Wednesday, which restricts certain US investments in sensitive technology in China and requires government notification of funding in other tech sectors. Nvidia’s financial officer expressed concerns earlier this year that restrictions on AI chip exports to China could result in lasting missed opportunities for the US industry. Neither Nvidia nor the Chinese internet giants have provided a comment on the matter at this time.