Sources: ByteDance, Alibaba, and Tencent ordered 3M+ of Nvidia's new RTX PRO 5500 GPUs worth $35B+, in a rush to secure less powerful, export-compliant chips

China's largest tech firms are buying less advanced GPUs, signaling a shift in AI hardware strategy.

Chinese tech giants ByteDance, Alibaba, and Tencent have placed orders for over three million of Nvidia's new RTX Pro 5500 graphics processing units. The total value of these orders reportedly exceeds $35 billion, according to Reuters, which cited sources familiar with the matter. These newly ordered chips are understood to be less powerful variants, designed to comply with US export restrictions aimed at limiting China's access to advanced AI and military technology. However, Nvidia has indicated to its customers and partners that it cannot guarantee it will be able to fulfill the entirety of these substantial orders. The companies involved have not yet responded to requests for comment.

The significant order for less powerful GPUs indicates a strategic pivot by China's leading technology firms, driven by US export controls. Facing limitations on access to Nvidia's most advanced chips, these companies are securing substantial quantities of the Pro 5500 series to ensure continued AI development and deployment, albeit with potentially reduced performance ceilings. This move highlights the ongoing tension between geopolitical restrictions and the insatiable demand for AI capabilities within China's tech sector.

This situation underscores the critical role of export controls in shaping the global semiconductor market for AI. Nvidia's challenge in fulfilling these orders, despite offering a compliant product, suggests potential supply chain constraints or demand far exceeding even these adjusted expectations. For companies like ByteDance, Alibaba, and Tencent, it means a new era of hardware procurement focused on navigating regulatory landscapes while attempting to maintain competitive AI advantages.