Chinese tech giants to stockpile $5 billion Nvidia GPUs to power generative AI products

August 10, 2023 10:29 am

Chinese tech giants are stocking up on high-performance Nvidia chips to power their generative artificial intelligence (AI) ambitions.

Baidu, ByteDance, Tencent, and Alibaba have ordered $1 billion worth of A800 graphics processing units (GPUs) from the US chipmaker for delivery this year, the Financial Times reported, citing several people familiar with the matter.

Those companies had also purchased a further $4 billion worth of the GPUs to be delivered in 2024, two people close to Nvidia said. 

Nvidia's GPUs hold paramount importance for companies venturing into training Large Language Models (LLMs) and crafting generative AI products due to their unparalleled computational potency and parallel processing capabilities. 

A800 GPU is an alternative product to the A100 GPU for customers in China. Last year, the US Department of Commerce included a series of advanced chips, including Nvidia A100, on its export control list to China. Therefore, A800, a scaled-down version of the A100, was developed to circumvent these export controls.

As the race between companies to develop state-of-the-art generative artificial intelligence products intensifies, getting access to more GPUs is critical.

Alibaba has launched its own LLM, "Tongyi Qianwen," which it has embedded into nearly all apps under its wings; Baidu has launched an LLM called "Wenxin Yiyan"; and ByteDance is working on a variety of generative AI products including an AI chatbot codenamed "Grace," which is currently undergoing internal testing.

TikTok owner ByteDance has stockpiled at least 10,000 Nvidia GPUs to support its ambitions, the Financial Times reported, citing sources. The company has also ordered nearly 70,000 A800 chips for delivery next year, worth about $700 million, they added.