The largest internet companies in China, including Baidu, ByteDance (owner of TikTok), Tencent, and Alibaba, have ordered high-performance Nvidia chips for a combined $5 billion.
Building generative artificial intelligence systems requires these chips. The orders are divided into $4 billion worth of graphics processing units slated for delivery in 2024 and $1 billion worth of orders for around 100,000 A800 processors to be delivered in 2023.
The A800 processor from Nvidia is only available in China to abide by export control laws. The American Government asked Nvidia to stop sending its most advanced processor chips used in AI projects to China.
This action follows the Biden administration’s adoption of regulations intended to restrain China’s semiconductor industry while making significant investments in the United States.
Nvidia’s Finance Chief previously expressed concerns that restricting the export of AI chips to China would result in a long-term loss of opportunities for the U.S. industry. However, he noted that the company expected no immediate material impact.
Baidu, ByteDance, Tencent, and Alibaba have not replied to Reuters’ requests for comments; Nvidia declined to comment on the allegations.