Chinese tech giants like ByteDance (TikTok), Tencent, Baidu, and Alibaba have shown a significant interest in Nvidia’s High Performance Computing (HPC) products. ByteDance alone has already caught up with the entire Chinese market’s orders from Nvidia in 2022 in terms of dollar value. ByteDance has ordered around $1 billion worth of Nvidia GPUs in 2023, including the A100 and H800 cards. Nvidia’s Average Sale Price (ASP) is approximately $10,000 per accelerator. The increased investments in HPC hardware by Chinese tech giants are motivated by China’s desire to compete with the West in the field of AI, driven by economic, political, and sociological factors.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Chinese tech giants increasing demand for Nvidia’s HPC | Increased demand for Nvidia’s HPC | Greater integration of Nvidia’s HPC in China | China’s desire to compete in AI and technology sector |
| ByteDance orders $1 billion worth of Nvidia GPUs | Growing investment in Nvidia GPUs | Increased adoption of Nvidia GPUs in China | Desire to keep up with AI advancements in the West |
| Chinese tech giants’ volume and product demands exceed | Overwhelming demand for HPC hardware | Expansion of distributor chain in China | Need to meet the demands of tech giants in China |
| China’s interest in AI driven by economic and political | Desire to not fall behind in AI | Increased investment in AI technologies | Economic potential and state control apparatus |
| Unclear if reported figure refers to delivered or orders | Uncertainty in delivery of H800 cards | H800 deliveries throughout the year | Lack of clarity in reported figures |
| ByteDance’s high spending reflects abundance of funds | Increased spending on investments | Financial capacity for further investments | Availability of funds for tech investments in China |