China’s internet giants order $5bn of nvidia chips to power ai ambitions

China’s internet giants order $5bn of nvidia chips to power ai ambitions

China’s internet giants are scrambling for high-performance, vital Nvidia chips to build generative AI systems, sending orders for $5 billion into a buying frenzy fueled by fears that the United States will impose new export controls.

Baidu, ByteDance, Tencent and Alibaba have placed orders worth $1 billion for about 100,000 A800. Processors from the US chipmaker to be delivered this year, according to several people familiar with the matter. Two people close to Nvidia said the Chinese groups. Also bought an additional $4 billion worth of GPUs to be delivered in 2024. 

The A800 is an underpowered version of Nvidia’s cutting-edge A100 GPU for data centers. Due to export restrictions imposed by Washington last year. That in an attempt to stifle Beijing’s technological ambitions, Chinese tech companies are only able to buy the A800s, which have slower data transfer rates than the A100.

As the hype around AI intensified over the past year, Nvidia GPUs have become the hottest commodity among the world’s largest technology companies for providing computing power to the development of large language AI models.

However, Chinese internet groups are racing to stock up on A800 chips over concerns. That the Biden administration is considering new export restrictions that would grab. However, vulnerable Nvidia chips, as well as a broader GPU shortage driven by outsized demand.

Moreover, On Wednesday, Washington announced a ban starting next year on some US investments in quantum computing, cutting-edge chips and artificial intelligence in China.

“Without these Nvidia chips, we can’t continue to train any large language model,” said a Baidu employee who declined to be named.