ByteDance, Alibaba, Tencent order $35B in Nvidia chips

ByteDance, Alibaba ↘ 2.48% and Tencent have ordered more than 3 million of Nvidia's ↘ 4.40% new RTX PRO 5500 graphics cards, with a combined sticker price above $35 billion, Reuters reported on Tuesday, citing people familiar with the matter. Nvidia has told customers and partners it cannot guarantee it will fill the orders because Chinese demand far exceeds planned production. The rush shows how much Chinese firms still want Nvidia hardware, even as U.S. export rules limit them to less powerful chips.galvnews.com

Demand Outstrips Supply

The cards cost about $11,400 each, according to two sources cited by Reuters. Total orders from customers in China have passed 6 million units. One source said Nvidia warned partners they might receive only 5% to 10% of what they requested. Another said Nvidia had indicated it could make no more than 3 million RTX PRO 5500 cards worldwide in 2027.galvnews.com

Sources said part of the shortfall comes from Nvidia's manufacturing priorities. Starting in 2027, the company is expected to devote much of its capacity at TSMC Taiwan Semiconductor Manufacturing Company Limited ↘ 4.52% to Rubin, its next-generation data-centre platform. Nvidia has told customers to expect early samples in December, with commercial deliveries beginning in the first quarter of 2027, according to the report. ByteDance, Alibaba and Tencent did not respond to Reuters' requests for comment, Bloomberg Law noted.investing.com+1

An Export-Compliant Workaround

The RTX PRO 5500 is a workstation chip built for professional computers rather than large AI clusters. It is still among the most powerful Nvidia chips Chinese buyers can get. The Blackwell-based B300 cannot be sold to China, and H200 exports are reviewed case by case. Chinese companies plan to use the cards mainly for AI inference, which needs less computing power than training models, Reuters reported. The chip performs about as well as the RTX 6000D, which major Chinese firms largely passed over last year.galvnews.com

The orders follow reports that China's Ministry of Industry and Information Technology asked ByteDance and Alibaba to submit their purchase plans for the chip and signaled it intends to approve them, according to The Information's reporting. Smaller buyers are also lining up. Shenzhen-listed Tansun Technology disclosed in an October 13 filing that it had agreed to buy 20,000 of the cards.finance.yahoo.com

Nvidia Points to Policy

Chief Executive Jensen Huang has said U.S. restrictions cut Nvidia's share of China's AI data-centre chip market from a near monopoly to effectively nothing. Meanwhile, Huawei has gained ground. A Nvidia spokesperson said Chinese producers of workstation chips have seen "unprecedented growth since 2022" and added: "US firms continue to be restricted by a combination of outdated US export controls, which cover gaming products released nearly a half a decade ago, and China's own limit on US imports," Reuters reported.galvnews.com