Nvidia’s AI Chips in High Demand as Chinese Big Tech Order $5 Billion’s Worth
Key takeaways
- Baidu, Tencent, ByteDance and Alibaba have ordered $5 billion worth of Nvidia’s A800 processing chips
- The news comes as President Biden signs an executive order limiting American investment in Chinese tech companies
- Nvidia’s share price has climbed over 200% since the start of the year
The AI boom doesn’t show any signs of slowing down, with the latest news that Chinese Big Tech companies are snapping up Nvidia’s AI processing chips like there’s no tomorrow. That might literally be the case if relations worsen between China and the U.S., which just signed a new executive order limiting investment into the country. Let’s get into the details.
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What’s the latest with Nvidia?
Chinese tech companies can’t get enough of the AI boom. The likes of Baidu, TikTok founder ByteDance, Tencent and Alibaba have ordered $1 billion’s worth of Nvidia processing chips to be delivered by the end of the year. That translates to about 100,000 of Nvidia’s A800 processors.
The Big Tech giants of China have also made forward purchases of graphics processing units worth $4 billion to be delivered in 2024. The A800 processor is in line with export rules after the U.S. government asked Nvidia to stop exporting its two top-line computer chips to China for AI-related innovation.
Last week President Biden signed an executive order curtailing American venture capital and private equity firms from investing in certain Chinese tech companies. The executive order limits any investment into Chinese AI, quantum computing and semiconductor chips, citing national security as the primary concern.
Nvidia’s share price performance in 2023
We all know Nvidia has been one of the craziest gainers the tech market has ever seen. Nvidia’s share price has jumped 210% since the start of the year and is trading at around $444, though it’s down from July’s peak of $470.
Nvidia’s earnings report is set for release next week, though Wall Street is starting to get nervous after last quarter’s beat was described as the “best ever” thanks to its bet on AI.
That hasn’t stopped UBS, Wells Fargo and Morgan Stanley all raising their price estimates for the stock, which caused the share price to climb 10% on Monday.
The bottom line
Geopolitical tensions aside, Nvidia is set to continue flying up the stock market ladder as more technology companies worldwide order AI-capable computer chips. Having spent the last decade preparing for the AI revolution, Nvidia is set to benefit in the long run — as are Nvidia’s investors.
Nvidia is just one example of the massive tech market gains this year. Dive into the future with Q.ai’s Emerging Tech Kit. Covering the hottest trends from AI to quantum computing, this Kit is your ticket to tech’s next big thing. And don’t sweat the details; our AI’s got your back, helping ensure your investments are sharp and timely.
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