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Chinese tech giants place $5 billion order from Nvidia for artificial intelligence

Both countries and companies are making serious investments in order not to fall behind in artificial intelligence. In fact, the US even imposed some sharp restrictions on US companies in order to break China's power in this area. However, Chinese companies are following the restrictions...
 Chinese tech giants place $5 billion order from Nvidia for artificial intelligence
READING NOW Chinese tech giants place $5 billion order from Nvidia for artificial intelligence
Both countries and companies are making serious investments in order not to fall behind in artificial intelligence. In fact, the US even imposed some sharp restrictions on US companies in order to break China’s power in this area. However, Chinese companies continue their investments to achieve their artificial intelligence goals despite the restrictions. According to the reports, Baidu, ByteDance, Tencent and Alibaba have recently placed a large number of bulk orders from Nvidia to feed their productive artificial intelligence (AI) programs.

5 billion dollar order from Nvidia

According to the Financial Times, Chinese companies have placed an order for 100,000 units of Nvidia’s A800 GPU, worth $1 billion. The companies plan to receive this shipment from the US chipmaker by the end of this year. The companies have also placed an additional $4 billion bulk order for platforms to be delivered in 2024.

As we mentioned in our previous news, Nvidia’s A800 GPU is actually a trimmed variant of the A100 optimized for China. Theoretically, the A800 runs at 70 percent of the flagship A100 GPUs. Meanwhile, the A100 GPUs are also significantly weaker than the firm’s H100 solutions.

China does not want to be left behind

Due to export restrictions announced by the US government, Nvidia can only sell A800 processors to Chinese companies. Export restrictions allow Nvidia to sell processors with chip-to-chip transfer speeds of less than 600GBps, preventing sales of A100 and A800-based systems or solutions in China. The same is true for AMD and other US companies.

With the threat of more restrictions as well as massive demand for GPUs, Chinese companies are stocking up on GPUs to make sure they have the hardware to meet their AI needs. Employees with direct knowledge of the matter said ByteDance is stocking at least 10,000 Nvidia GPUs to support its goals. The company is also said to have ordered 70,000 A800 chips worth around $700 million for delivery next year.

While Chinese companies did not comment on the matter, Nvidia issued a statement regarding the report, saying that companies invest billions of dollars in data center components each year, often placing their orders months in advance. Additionally, as advances in productive AI increase demand for GPUs, experts fear a 2020-like GPU shortage could happen again.

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