Chinese Giant Internet Company Orders IDR 75 Trillion Of Nvidia Chip For Artificial Intelligence

Nvidia's technology is being targeted by the giant Chinese internet company. (photo: dock. nvidia)

JAKARTA - China's giant internet company is racing to acquire high-quality Nvidia chips that are critical to building a generative artificial intelligence system. Their total order reached a value of 5 billion US dollars (Rp75.5 trillion), the Financial Times reported on Wednesday, August 9.

Baidu, owner of TikTok ByteDance, Tencent, and Alibaba have ordered $1 billion worth of chips to acquire around 100,000 A800 processors from the United States chip company, which is expected to be delivered this year. This is an FT report citing several people familiar with the matter.

Groups in China have also purchased additional $4 billion worth of GPUs expected to be delivered by 2024, according to the report.

An Nvidia spokesperson did not elaborate on this report but said that "consumer internet companies and cloud service providers invest billions of dollars in data center components annually, often placing orders months earlier."

In October last year, President Joe Biden's administration issued a broad set of rules designed to freeze China's semiconductor industry while the US is pouring billions of dollars in subsidies into its own chip industry.

Nvidia is offering China's A800 processor to comply with export control regulations after US officials asked the company to stop exporting its two main computing chips to the country for artificial intelligence-related work.

The FT report comes as President Biden last Wednesday signed an executive order that would narrowly ban some US investments in sensitive technology in China and required government notices of funding in other technology sectors.

Nvidia's chief finance said in June that the export restriction of artificial intelligence chips to China "will result in the loss of permanent opportunities for the US industry," although the company does not expect a direct material impact.

Baidu, ByteDance, Tencent, and Alibaba did not immediately respond to a Reuters request for comment.