Alibaba (NYSE:BABA), ByteDance (BDNCE) and other Chinese tech companies remain interested in Nvidia’s (NASDAQ:NVDA) AI chips despite regulators in China strongly discouraging them from such purchases, Reuters reported, citing people familiar with the procurement discussions.
They want reassurance that their orders of Nvidia’s H20 chips, which the U.S. company in July regained permission to sell in China, are being processed. They are also monitoring Nvidia’s plans for a more powerful chip, tentatively called B30A and based on its Blackwell architecture, the report added.
Nvidia, Alibaba and ByteDance did not immediately respond to a request for comment from Seeking Alpha.
The B30A, if approved for sale by U.S., could cost about double the H20, which currently sells in the range of $10,000 to $12,000, according to the report.
Chinese tech companies perceive the potential B30A pricing as a good deal. One person told the news agency that the B30A promises to be up to six times more powerful than the H20, the report noted.
Both chips are downgraded versions of models sold outside China and have been developed specially to adhere to U.S. export curbs.
China is keen for its tech industry to not depend on U.S. chips. Chinese authorities have summoned companies, including Tencent and ByteDance, over their purchases of the H20 chip, asking them to explain their reasons and expressing concerns over information risks, sources said last month, as per the report.
Tencent did not immediately respond to a request for comment from Seeking Alpha.
However, despite pressure, demand for Nvidia’s chips remains strong in China due to the limited supply of products from domestic rivals such as Huawei and Cambricon, the report added.
Nvidia’s chips also perform better than local products, the report noted.
Nvidia and other critics of U.S. export curbs note it is better if Chinese companies continue to use its chips, which work with Nvidia’s software tools, so that developers do not completely switch over to products from competitors such as Huawei Technologies.
In May, Nvidia’s CEO Jensen Huang had discussed concerns about Huawei’s growing AI prowess with U.S. lawmakers.
U.S. President Donald Trump has also struck a deal with Nvidia for the company to give the U.S. government 15% of the revenue from the sale of H20 Chips in China.
Asked about its position versus rivals in China, Nvidia said in a statement to Reuters that the “competition has undeniably arrived.” It declined further comment.
During its earnings call, Nvidia executives said the company had received some export licenses for H20 but had yet to start shipping because it was sorting out some issues related to the U.S. deal to give the government a part of its China sales.
Huang has also assured Chinese customers to not be concerned about H20’s availability and has told suppliers that demand remains strong, the report added.
The news agency reported in July that Nvidia had an inventory of 600,000 to 700,000 H20 chips and had asked Taiwan Semiconductor Manufacturing (TSM) to make more. Sources also said Nvidia is hoping to deliver samples of the B30A chip to Chinese clients for testing as early as September, the report noted.