Oct 20 (Reuters) – ByteDance, Alibaba and Tencent have ordered more than 3 million of Nvidia’s new RTX PRO 5500 graphics cards with a collective sticker price of over $35 billion, two people familiar with the matter said, in a rush for a less powerful but export-compliant chip amid US restrictions on trade with China.
US-based chipmaker Nvidia has told customers and partners it cannot guarantee that it can fill the orders because demand from Chinese technology companies far exceeds planned production, the two sources and a third person familiar with the matter said. They requested anonymity because they are not authorised to speak to the media.
The RTX PRO 5500 is a workstation chip, designed for powerful professional computers rather than the large data-centre clusters that use Nvidia’s most advanced AI processors. But it is among the most powerful Nvidia chips that are still available to Chinese buyers.
Nvidia’s Blackwell-based B300 data-centre chip is not allowed to be sold to Chinese buyers under US export controls, while exports of its Hopper-based H200 are reviewed on a case-by-case basis and are subject to licensing conditions.
One source said Nvidia told partners they might receive only 5% to 10% of the quantities requested. Another said the company had indicated it could produce no more than 3 million RTX PRO 5500 cards globally in 2027. Total orders from customers in China have exceeded 6 million, two of the sources said.
The three Chinese tech giants’ orders are for cards priced at about $11,400 each, two of the sources said, giving them a potential combined value of more than $35 billion.
The scale of the orders, which have not been previously reported, underscores the ongoing appetite among Chinese companies for Nvidia hardware despite the US curbs.
Nvidia Chief Executive Jensen Huang has said the restrictions reduced Nvidia’s share of China’s AI data-centre chip market from a near monopoly to effectively nothing. But demand for the RTX PRO 5500 suggests Nvidia retains a sizeable potential market in China through less powerful products that may still be available.
The surge in demand also highlights how US restrictions have tightened computing-power supplies in the world’s second-largest economy as Chinese companies race to develop cutting-edge AI models and propel Beijing’s effort to deploy the technology across its industries.
Washington’s curbs have pushed Chinese firms toward domestic suppliers, while Beijing has encouraged the use of homegrown chips.
Huawei, in particular, has gained market share, though Chinese chipmakers have generally struggled to match leading American products, partly because separate restrictions have limited access to the foreign equipment that is used to make the most advanced semiconductors.
An Nvidia spokesperson said Chinese producers of workstation chips and cards have experienced “unprecedented growth since 2022,” when the curbs were first imposed.
“US firms continue to be restricted by a combination of outdated US export controls, which cover gaming products released nearly a half a decade ago, and China’s own limit on US imports,” the spokesperson said.
ByteDance, Alibaba and Tencent did not respond to requests for comment.
The US Commerce Department’s Bureau of Industry and Security, which oversees the export controls, and China’s Ministry of Industry and Information Technology did not respond to requests for comment.
AN EXPORT-COMPLIANT ALTERNATIVE
The RTX PRO 5500 is less powerful than Nvidia’s H200 and B300 chips, which are designed to be linked in large numbers for the most demanding AI training and deployment workloads.
Chinese companies are seeking to use the cards primarily for AI inference, or running trained models to generate chatbot responses, the three sources said. Inference generally requires less computing power than training models on massive datasets.
The RTX PRO 5500 is similar to the RTX 6000D in performance, according to product specifications seen by Reuters.
Nvidia launched the RTX 6000D in the middle of last year as a reduced-capability product designed to meet US export restrictions. Major Chinese tech firms initially showed little interest, with some declining to place orders, Reuters reported last year.
At the time, buyers viewed the chips as overly expensive given their capabilities and hoped Washington would eventually allow sales of more powerful Nvidia processors.
Those expectations have faded as restrictions have remained in place and AI computing capacity has remained scarce, making the RTX PRO 5500 a more attractive substitute, two of the sources said.
SUPPLY SQUEEZE
Nvidia’s inability to promise full deliveries reflects both a surge in demand and its manufacturing priorities, two of the sources said.
Starting in 2027, Nvidia is expected to devote much of its capacity at Taiwan Semiconductor Manufacturing Co to Rubin, its next-generation platform for large-scale data centres, rather than products like the RTX PRO 5500, two of the sources said. TSMC declined to comment.
Nvidia has told customers to expect early samples in December, with commercial deliveries beginning in the first quarter of 2027, they added.
The RTX 6000D has since been discontinued and its market price in China has doubled, one of the sources said.
In an October 13 filing, Shenzhen-listed fintech and AI-computing services company Tansun Technology said it had agreed to buy 20,000 RTX PRO 5500 cards from an unidentified counterparty.
It cautioned that supply shortages, industry demand and overseas technology controls could delay deliveries or reduce volumes.
(Reporting by Reuters Staff; Editing by Eduardo Baptista and Thomas Derpinghaus)
Comments