ByteDance, Alibaba, and Tencent order NVIDIA chips worth over $35B
What's the story
Chinese tech giants ByteDance, Alibaba, and Tencent have placed orders for over three million of NVIDIA's new RTX PRO 5500 graphics cards. The total value of these orders exceeds $35 billion. The move comes as the companies rush to secure a less powerful but export-compliant chip amid US trade restrictions with China.
Supply challenge
NVIDIA can't guarantee fulfillment of orders
As per Reuters, NVIDIA has told its customers and partners that it can't guarantee fulfillment of these orders.
The demand from Chinese tech firms is far outpacing the company's planned production capacity.
One source said NVIDIA told partners they may get only 5% to 10% of their requested quantities.
Another said the company could make no more than three million RTX PRO 5500 cards globally in 2027.
Chip details
One of the most powerful NVIDIA chips
The RTX PRO 5500 is a workstation chip, built for high-performance professional computers.
It's not as powerful as NVIDIA's most advanced AI processors used in large data-center clusters.
However, it is one of the most powerful NVIDIA chips still available to Chinese buyers.
The three Chinese tech giants have ordered cards priced at about $11,400 each, two of the sources said.
Market impact
US restrictions have drastically affected NVIDIA
NVIDIA CEO Jensen Huang has said that US restrictions have reduced NVIDIA's share of China's AI data-center chip market from a near monopoly to effectively nothing.
However, the demand for RTX PRO 5500 indicates that NVIDIA still has a significant potential market in China through less powerful products that may still be available.