Internet behemoths in China are on the prowl for high-performance Nvidia chips necessary for creating generative artificial intelligence systems, placing orders totaling $5 billion. The shopping frenzy is sparked by worries that the US would implement new export restrictions.
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.
A800 is the less powerful version of the cutting-edge A100 GPU for data centers by Nvidia. Due to export limitations put in place by Washington last year in an effort to stifle Beijing’s technology ambitions, Chinese tech companies can only purchase A800s, which have slower data transfer rates than A100s.
As the excitement surrounding AI has grown over the past year, Nvidia’s GPUs have emerged as the most in-demand product among the largest tech companies in the world for providing computational capacity for the creation of complex language AI models.
Chinese internet organizations are rushing to stockpile A800 chips out of concern that the Biden administration may be considering further export limits that would include even Nvidia’s less-powerful chips, as well as a larger GPU scarcity brought on by a spike in demand.
On Wednesday, Washington placed additional restrictions on some US investments in China’s quantum computing, advanced chip, and artificial intelligence industries which will come into effect from next year.
According to recent news, the A100 chips by Nvidia are reportedly offered for a stunning $20,000 per unit, which is double the standard price. Despite export limitations put in place by the United States, Chinese sellers are profiting from the soaring demand for high-end Nvidia chips, particularly the A100 artificial intelligence chips.