Chinese tech giants ByteDance (TikTok), Tencent, Baidu and Alibaba simply can't get enough of Nvidia's High Performance Computing (HPC) products. This news comes from Chinese media, which reports that TikTok creator, ByteDance, alone, has already caught up (in pure dollar terms) to what the entire Chinese market ordered from Nvidia in 2022.
Chinese publication Jitwei revealed that ByteDance has already ordered around $1 billion worth of Nvidia GPUs in 2023 so far, which amounts to around 100,000 units split between Nvidia's A100 (ordered before the US government told Nvidia to stop selling its top-performing HPC cards to China, back in August 2022) and H800 cards - that last series number corresponding to a Hopper-based custom accelerator Nvidia built to comply with export restrictions — a nerfed cameo of the H100 accelerator. Nerfed or not, Nvidia's Average Sale Price (ASP) seems to sit at around $10,000 per accelerator.
Nvidia made some noise back when the export restrictions were first placed, saying it would lose roughly $400 million — and that such a loss could impair its H100 chip development. We'll never know whether the H100 accelerator's development would or wouldn't have actually been completed, though, since the U.S. government moved the export ban to September, allowing NVIDIA to cram in some of the extra shipments (and revenue) necessary for the H100.
The perspective is staggering, really, considering the remaining Chinese tech giants who have also heavily increased their investment into HPC hardware. If ByteDance alone has already eclipsed Nvidia's sales in China for an entire year, what can be said for the Chinese market? According to Chinese industry sources, the country's tech giants' volume and product demands are too much for China's own distributor chain to handle; which explains why at least ByteDance and Alibaba have been reported as directly negotiating product with Nvidia (as if the H800's existence allowed any doubt on that).
The increased investments are obvious, as is part of its motivation: from its perspective, China can't afford to let the West race ahead with complete dominance in the field of AI. China's interest is buoyed not only by the promise of the $4.4 trillion dollars that AI can bring to the world's economy (that's according to McKinsey, by the way). Remember that there are also political and sociological choices here, in that China's state control apparatus (like the West's) needs a stream of high-tech solutions constantly feeding into it. We may be forgetting about them in the chaotic soup of Generative AI and Large Language Models we see ourselves in, but AI also powers things such as CCTV analytics and facial recognition tech (just as offered through Nvidia's FaceDetect technology, by the way).
This particular bit is also interesting: since Nvidia's H800 cards only started production on March this year, there can't have been a huge proportion of them delivered by Nvidia yet — it's expected deliveries of the H800 will actually last throughout the year. It's unclear if the $1 billion figure being reported refers to already-delivered or ordered-only shipments. Of course, ByteDance did spend $3 billion last year just in share repurchases from its investors — with that kind of money flying around, what's an extra billion or two?
I'm sure you can relate. We all can.
