Chinese Firms Including ByteDance, Alibaba Place $16 Bn NVIDIA GPU Orders: Reports

Chinese big tech companies, such as ByteDance, Alibaba, and Tencent, have collectively placed orders worth $16 billion for NVIDIA’s H20 GPUs, The Information has reported. 

The increased demand is likely due to the thriving AI ecosystem in China, with all the major players developing foundational models, most of which are available as open source. Models from Alibaba (Qwen) and DeepSeek AI have consistently demonstrated performance comparable to AI models developed in the United States. 

China represents a challenging market for NVIDIA to export GPUs because of restrictions imposed by the United States government. 

After the US implemented export restrictions on NVIDIA's high-end GPUs, the company introduced a less powerful version of its Hopper GPU, the H20, to legally export it to China. 

However, Bloomberg reported in January that officials from President Donald Trump’s administration are also in discussions to restrict the export of H2O chips. Therefore, if NVIDIA were to ship the chips to China, it would need to do so before any further restrictions come into effect. 

A report from Reuters last month revealed that Chinese companies are increasing their orders for NVIDIA’s H20 chip to satisfy the growing demand for DeepSeek’s affordable models. 

Furthermore, as per a report last December, Omdia estimated that ByteDance and Tencent each ordered approximately 2,30,000 NVIDIA chips for 2024. It was also reported that DeepSeek possess around 50,000 NVIDIA GPUs. 

The Information also revealed that NVIDIA generated $17 billion in sales from China in the 12 months ending January 26, accounting for 13% of its total revenue. 

Previously, NVIDIA shipped the H800 GPU, a less powerful version of the H100 GPU. The H100 offers a transfer rate of 600 gigabytes per second, compared to the H800’s 300 gigabytes per second. 

Soon after, the US also banned the export of NVIDIA’s H800 to China, preventing the company from selling chips even at a reduced transfer rate.