Tencent, Alibaba Acquire Nvidia Chips from ByteDance Amid Export Curbs
- tech360.tv
- 6 hours ago
- 2 min read
Tencent Holdings and Alibaba Group Holding have purchased Nvidia graphics processing units (GPUs) from ByteDance’s stockpile, as Chinese firms race to secure AI hardware amid tightening US export restrictions.
ByteDance, the parent company of TikTok, had previously amassed about 100 billion yuan (USD 13.7 billion) worth of Nvidia’s H20 chips. Tencent acquired approximately 2 billion yuan worth of these GPUs in the first quarter to support its artificial intelligence development, including its ChatGPT-style application, Yuanbao.
Alibaba also bought GPUs from ByteDance for similar AI-related purposes, according to a report by Caijing.
ByteDance reportedly sells less than 10% of its total computing power inventory, generating revenue through its cloud computing arm, Volcano Engine.
The purchases come as demand for computing power surges in China, driven by rapid AI adoption and increasing difficulty in accessing advanced semiconductor technologies due to US export controls.
Nvidia’s H20 chip, once the most powerful AI processor legally available in China, is now also subject to export approval. The chip is slower than Nvidia’s H100 and Blackwell series but remains in high demand.
Chinese tech firms, including ByteDance, Alibaba, and Tencent, ordered at least USD 16 billion worth of H20 chips in the first quarter, many of which featured upgraded high-bandwidth memory from the Blackwell series.
China contributed USD 17 billion, or 13%, of Nvidia’s total revenue in its last financial year ending Jan. 26. The company warned that new restrictions on H20 exports could cost it up to USD 5.5 billion.
Morningstar analyst Brian Colello said Nvidia’s China business could “fall to nearly zero,” with no near-term recovery expected.
In response, Nvidia CEO Jensen Huang visited China this month and pledged to optimise products for regulatory compliance and continue serving the Chinese market, according to China Central Television.
As Nvidia chips become harder to obtain, domestic alternatives are gaining traction. Huawei Technologies is preparing to test its Ascend 910D AI processor, expected to outperform Nvidia’s H100.
Huawei is also set to ship its 910C AI chip to Chinese clients as early as next month.
Cambricon Technologies, another Chinese AI chipmaker, reported strong first-quarter results with revenue of 1.1 billion yuan and a net profit of 356 million yuan, marking a 42-fold increase from the previous year.
Tencent and Alibaba bought Nvidia H20 GPUs from ByteDance’s stockpile
ByteDance had stockpiled about USD 13.7 billion worth of Nvidia chips
US export restrictions have tightened access to advanced AI chips
Source: SCMP
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