ByteDance, Alibaba, Tencent place over $35 billion worth of Nvidia chip orders

ByteDance, Alibaba, and Tencent have placed orders for more than 3 million Nvidia RTX PRO 5500 graphics cards, valued at over $35 billion, according to two unnamed individuals familiar with the situation. These companies are seeking to acquire these chips, which are less powerful but compliant with U.S. export regulations, amid restrictions limiting sales of more advanced Nvidia products to Chinese buyers. Nvidia has informed customers and partners that it may struggle to meet the demand due to high levels of interest from Chinese technology firms, one of the sources said. A third individual confirmed this information. The RTX PRO 5500 is a workstation chip intended for use in high-performance computers rather than the large data centres that employ Nvidia's most advanced AI processors. It is currently among the most powerful chips available to Chinese buyers. Nvidia’s Blackwell-based B300 data centre chip is prohibited from being sold to Chinese buyers under U.S. export controls, while exports of its Hopper-based H200 are subject to review and licensing conditions. One source stated that Nvidia has indicated it may only be able to fulfill 5% to 10% of the quantities requested by customers. Another noted that the company expects to produce no more than 3 million RTX PRO 5500 cards globally in 2027. Two sources added that total orders from Chinese customers have surpassed 6 million units. Each card is priced at approximately $11,400, according to two of the sources, resulting in a potential combined value exceeding $35 billion. This level of ordering, previously unreported, highlights the continued interest of Chinese companies in Nvidia hardware despite U.S. restrictions. Nvidia CEO Jensen Huang has mentioned that the restrictions have significantly reduced the company’s share of China’s AI data centre chip market, from near monopoly status to effectively zero. However, the demand for the RTX PRO 5500 indicates that Nvidia still holds substantial potential in the Chinese market through less powerful products that remain accessible. The increased demand also reflects how U.S. restrictions have tightened computing power availability in China, prompting local companies to accelerate efforts to develop cutting-edge AI models and integrate the technology into various sectors. Washington’s measures have driven Chinese firms toward domestic suppliers, while Beijing has promoted the use of locally produced chips. Huawei, in particular, has gained market share, although Chinese chipmakers generally face challenges in matching top-tier American products, partly due to restrictions limiting access to foreign manufacturing equipment needed for producing advanced semiconductors. An Nvidia spokesperson noted that Chinese producers of workstation chips and cards have experienced unprecedented growth since 2022, when the export restrictions were initially implemented. The spokesperson attributed this to a combination of outdated U.S. export controls affecting gaming products from nearly five years ago and China’s own limits on importing U.S. goods. ByteDance, Alibaba, and Tencent did not respond to requests for comment. The U.S. Commerce Department’s Bureau of Industry and Security, responsible for overseeing export controls, and China’s Ministry of Industry and Information Technology did not respond to requests for comment either. The RTX PRO 5500 is less powerful compared to Nvidia’s H200 and B300 chips, which are designed for linking in large numbers to handle the most demanding AI training and deployment tasks. Chinese companies intend to use these cards primarily for AI inference, running trained models to generate chatbot responses, which typically requires less computational power than training models on vast datasets. According to three sources, the RTX PRO 5500 will be used mainly for AI inference purposes.