Stock

ByteDance, Alibaba and Tencent order over $35B in Nvidia chips amid US curbs: report

ByteDance, Alibaba and Tencent have ordered more than 3 million of Nvidia’s RTX PRO 5500 graphics cards, with a combined potential value exceeding $35 billion.

The development came as Chinese technology companies scramble to secure computing power amid US restrictions on semiconductor exports, Reuters reported, citing two people familiar with the matter.

The orders reflect continued demand for Nvidia hardware in China despite Washington’s curbs on shipments of advanced artificial intelligence chips.

However, the US chipmaker has warned customers and partners that it cannot guarantee deliveries because demand from Chinese technology companies far exceeds its planned production, according to Reuters.

Nvidia struggles to meet Chinese demand

The RTX PRO 5500 is a workstation graphics card designed for powerful professional computers rather than the large data-centre clusters used to train and run advanced AI models.

However, it is among Nvidia’s most powerful chips still available to Chinese buyers.

One source told Reuters that Nvidia had informed partners they might receive only 5% to 10% of the quantities they requested.

Another source said the company had indicated it could manufacture no more than 3 million RTX PRO 5500 cards globally in 2027.

Total orders from Chinese customers have exceeded 6 million, two of the sources said.

The three Chinese technology giants have ordered cards priced at around $11,400 each, putting the potential combined value of their purchases above $35 billion.

The scale of the orders, which have not previously been reported, highlights the substantial appetite for Nvidia’s computing hardware in China, even as export restrictions limit access to its most advanced products.

US export restrictions reshape China’s AI chip market

Washington’s export controls have sharply curtailed China’s access to Nvidia’s leading AI processors.

The company’s Blackwell-based B300 data-centre chip cannot be sold to Chinese buyers under current restrictions, while exports of its Hopper-based H200 are reviewed case by case and remain subject to licensing conditions.

Nvidia Chief Executive Jensen Huang has said US restrictions reduced the company’s share of China’s AI data-centre chip market from a near monopoly to effectively nothing.

However, demand for the RTX PRO 5500 suggests that Nvidia continues to have a substantial potential market in China through less powerful products that remain available.

The restrictions have also intensified pressure on China’s domestic semiconductor industry as companies race to develop advanced AI models and Beijing seeks to deploy the technology across industries.

Huawei has gained market share as Chinese firms turn towards domestic suppliers.

However, local chipmakers have generally struggled to match leading American products, partly because separate restrictions have limited their access to the foreign equipment needed to manufacture advanced semiconductors.

Nvidia criticises restrictions as competition intensifies

An Nvidia spokesperson said Chinese manufacturers of workstation chips and graphics cards had experienced “unprecedented growth since 2022,” when the restrictions were first imposed.

“US firms continue ‌to be restricted ⁠by a combination of outdated US export controls, which cover gaming products released nearly a half a decade ago, and China’s own limit on US imports,” the spokesperson said.

The rush for RTX PRO 5500 cards illustrates the challenges facing Chinese technology companies seeking access to powerful computing hardware while navigating restrictions imposed by both Washington and Beijing.

For Nvidia, the orders represent potential demand for its products in a market where its access to advanced AI computing sales has been severely constrained.

Its ability to capitalise on that demand, however, will depend on production capacity, export rules and the policies governing US chip imports into China.

The post ByteDance, Alibaba and Tencent order over $35B in Nvidia chips amid US curbs: report appeared first on Invezz