ByteDance and Alibaba negotiate with Nvidia for H200 AI chips after US export approval, amid rising tech competition and uncertainty in China.
ByteDance and Alibaba are in discussions with Nvidia to acquire its H200 artificial intelligence chips, as reported by Reuters. This development follows a decision by the US government to permit the export of advanced semiconductors to China.
The Chinese companies are seeking substantial orders of Nvidia's second most powerful chip, pending approval from Beijing. Prior to this announcement, the most advanced chip allowed for export was the H20, which is significantly less powerful than the H200, estimated to be nearly six times weaker.
Beijing has not yet formally responded to the US government's decision. In recent months, authorities have restricted state-backed data centers and domestic technology firms from purchasing Nvidia's AI chips, creating uncertainty regarding whether approval will be granted. The China Economic Review in Hong Kong notes that ByteDance and Alibaba's interest in the H200 chips follows the US authorization for their export to China, which includes a 25 percent surcharge. The H200 is regarded as at least a generation ahead of China's current capabilities.
The eagerness of these companies to acquire the chips contradicts Beijing's earlier directive for firms to avoid Nvidia products and rely on domestic alternatives. Analysts suggest this shift may indicate China's recognition of the critical role advanced semiconductors play in the global AI race.
Questions remain about what concessions China may have made to secure access to the H200, beyond the surcharge. Nvidia's CEO, Jensen Huang, has stated that China is closely trailing the US in AI development, and the H200 could significantly accelerate its progress. While this move may boost Nvidia's sales, critics caution that it could undermine the US's competitive edge.
