Chinese tech giants offer a whopping 5 billion dollars to Nvidia!
Chinese tech companies plan to invest 5 billion dollars with the top player in artificial intelligence to advance further.
Prominent Chinese tech giants such as Baidu, ByteDance, Tencent, and Alibaba have recently secured substantial orders from Nvidia to bolster their generative AI initiatives. A report suggests that these enterprises have requested 100,000 units of Nvidia's A800 processor, with a combined worth of approximately $1 billion, aiming to obtain them by the close of this year. Moreover, an additional joint order amounting to $4 billion for processors has been placed, slated for 2024 delivery.
Interestingly, the A800 processor is a toned-down variant of the A100, which is primarily designated for data centers. The A100 itself is a less potent version of the H100 processor. However, due to stipulations imposed by the US government concerning exports, Nvidia can only offer A800 processors to Chinese entities. These restrictions mean that processors exhibiting chip-to-chip transfer rates surpassing 600GBps are off-limits, thus excluding A100 and H100 processors from potential sales.
Chinese tech giants offer a whopping 5 billion dollars to Nvidia!
The looming prospect of intensified constraints, combined with the surging demand for GPUs, has prompted Chinese corporations to accumulate substantial GPU reserves. This strategic stockpiling ensures their AI projects won't stall due to hardware shortages. Insiders from ByteDance have disclosed that the company has already amassed a minimum of 10,000 Nvidia GPUs to sustain its expansive aims. Reports also indicate a hefty order for roughly 70,000 A800 chips for next year's delivery, which equates to around $700 million.
Nvidia has commented on this situation, observing that internet-based consumer companies and cloud service providers invest billions annually in data center components, frequently placing orders well in advance. The escalating demand for GPUs, catalyzed by generative AI advancements, is stoking concerns over potential GPU shortages reminiscent of those in 2020. The persistent and growing demand for GPUs has prompted price hikes; for instance, the A800 processor has seen a price increase of over 50% when procured through distributors. As the AI sector continues its rapid expansion, Nvidia can anticipate even more bulk orders from companies eager to secure the necessary hardware for their vast language models.
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