Chinese Tech Companies To Gobble Up $4 Billion Worth of NVIDIA AI GPUs by 2024

The AI frenzy has gained most of its traction in China, where companies like Alibaba and ByteDance rush to enter the generative AI world. Financial Times reports that Chinese tech behemoths have reportedly ordered $5 billion worth of AI GPUs from NVIDIA, taking things to the next level.

Currently, Team Green offers cut-down variants of its AI GPUs in China, such as the A800 and H800. These models are a workaround for US sanctions since NVIDIA can't overlook the potential Chinese markets hold. Despite degraded performance, the GPUs are selling like hotcakes, particularly the A800s, which were reported to have reached a tremendous price tag of 500,000 yuan.

The report discloses that companies such as Baidu, ByteDance, Tencent, and Alibaba have ordered 100,000 NVIDIA A800 AI GPUs, amounting to a total worth of $1 billion. Moreover, the companies have also placed additional high volumes of orders, reaching a valuation of $4 billion, intending to be delivered by 2024. Tech companies are battling to integrate generative AI into their mainstream applications, which requires large-scale LLM training.

The huge increment in demand benefits NVIDIA, with them categorizing the frenzy as a business. However, in parallel, this has also brought trouble in Team's Green camp, in the form of huge volumes of orders coupled with bottlenecks amongst suppliers resulting in order backlogs for as long as six months. While NVIDIA plans to diversify its supply chain, it may not be as easy as it sounds, given that it involves several complications.

We recently reported detailed coverage on NVIDIA's highest-selling H100s GPUs, where we discussed every aspect of the AI hype in detail. The article explains every point mentioned; looking at it will summarise the situation for you. It looks like NVIDIA is in for a long run, reaping the financial rewards of the AI "gold mine" by itself for now. It is projected that the company could gather an astonishing $300 billion by 2027 through AI-driven sales; we have much to see right now.

News Source: Financial Times