Trying to stay ahead in the AI race, the Chinese tech giants are on a buying spree of Nvidia’s AI GPUs this year.
As noted by a Chinese news outlet, TikTok-owner ByteDance has alone purchased $1 billion worth of AI GPUs from Nvidia so far this year. Other giants like Tencent and Alibaba too are coughing up millions of dollars to poach available AI GPUs to compete with the Western companies rising in AI.
Poaching on Nvidia’s GPUs
The Generative AI craze led by ChatGPT is triggering several companies to make their own AI tools. While Western companies are leading the race, Chinese companies are strongly competing to stay afloat.
In this pursuit, the TikTok-owner ByteDance is aggressively buying AI GPUs for futuristic needs. As reported by a Chinese news outlet Jitwei, ByteDance has already bought around $1 billion worth of Nvidia GPUs this year. The order included 100,000 units split between Nvidia’s A100 and H100 cards, says the publication.
Well, this could be true, considering the US sanctions against China – prohibiting the sale of certain goods by American companies. This restricted Nvidia from selling a bulk of A100 GPUs to China, which promptly made a stripped-down variant of the same – called H100 GPU – and sell it to China.
These High-Performance Computing chips are sold at an average price of $10,000 per unit, earning billions of dollars for Nvidia and it seemed reasonable, as the AI industry is valued at $4.4 trillion by McKinsey – making it no wonder the tech companies are rushing to be a part of this.
If not for tools like Generative AI or Large Language Models, Chinese tech companies buy this high-end hardware for CCTV analytics and facial recognition technology, which China has a long history of investing heavily in.
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