China's Big Tech Order USD 5 Billion of Nvidia Chips To Target AI Ambitions


A $5 billion buying spree by China's internet titans to obtain high-performance Nvidia chips necessary for creating generative artificial intelligence systems has been sparked by worries that the US may implement new export limits. According to numerous people with knowledge of the situation, Baidu, ByteDance, Tencent, and Alibaba have ordered 100,000 A800 processors from the US chipmaker for delivery this year for a total of $1 billion. According to two persons close to Nvidia, the Chinese organizations had also ordered additional $4 billion worth of graphics processing units for delivery in 2024.

The cutting-edge A100 GPU for data centers from Nvidia is downgraded to the less powerful A800. Chinese IT businesses can only purchase A800s, which have slower data transmission rates than A100s, as a result of export restrictions put in place by Washington last year in an effort to stifle Beijing's technological ambitions. The top IT businesses in the world have turned to Nvidia's GPUs as the hype surrounding AI has grown over the past year in order to supply the computational power necessary for the creation of complex language AI models.

Fearing that the Biden administration is considering new export limits that would include even Nvidia's weaker chips and a bigger GPU scarcity brought on by excessive demand, Chinese internet groups are rushing to stockpile the A800 chips. A prohibition on some US investments in China's quantum computing, advanced chip, and artificial intelligence industries was declared by Washington for the beginning of the following year.

“Without these Nvidia chips, we can’t pursue the training for any large language model,” said one Baidu employee who declined to be named. 

Following the success of ChatGPT, the ground-breaking chatbot released by Microsoft-backed OpenAI eight months ago, the corporations are creating their own in-house big language models.

Current Issue