“Chinese AI companies are likely to receive only 1% of 6 million NVIDIA chips.”

(Seoul = Yonhap News) Reporter Kwon Sook-hee = Bloomberg News reported on the 4th that Chinese artificial intelligence (AI) and cloud companies are expected to receive only 1% of the 6 million NVIDIA chip orders.

According to sources, Chinese companies such as Alibaba, Tencent, and ByteDance ordered about 6 million units of the NVIDIA chip RTX Pro 5500.

However, these companies are expected to actually receive only tens of thousands of units, equivalent to 1% of their orders, over the next four months.

Sources said that the price of the chips exceeds $11,000 (about 14.73 million won) each, and the total order amount is about $70 billion (about 93.7 trillion won).

The U.S. government currently bans sales of Nvidia's cutting-edge chips to China, but the RTX Pro 5500 is not classified as a cutting-edge chip.

However, this applies to the highest level chips available in China.

Nvidia has been lobbying the U.S. government for years to sell more chips to Chinese customers.

However, in a situation where global production capacity is insufficient compared to demand, priority is being given to producing high-performance and high-profit semiconductors supplied to Open AI and Antropic.

In particular, as NVIDIA and Taiwan's TSMC focus their production capacity on next-generation products such as Rubin, the supply shortage of RTX Pro 5500 is expected to continue for the time being.

Due to the chip shortage, it is expected that Chinese AI developers will be limited in their ability to catch up with the United States for some time.

Bloomberg pointed out that the strong demand from Chinese AI computing companies proves that AI computing capabilities in China are currently severely lacking and that there are still limits to technological development.

Sources said that China's major AI developers are expected to receive the first batch of thousands of RTX Pro 5500 units by the end of this year, followed by tens of thousands of additional units around February next year.

One of the sources added that these are the confirmed supplies to date.

It is estimated that Chinese companies will be able to receive approximately 700,000 RTX Pro 5500 units by the end of next year due to Nvidia's expansion of production volume, but the actual supply quantity may vary.

Regarding this, an Nvidia spokesperson said, "Unfortunately, American companies are being restricted by the United States' outdated export controls, which regulate even gaming products released almost five years ago, and the Chinese government's import restrictions on American products."

He declined to comment on specific supply quantities.

Alibaba, Tencent and ByteDance did not respond to requests for comment.

According to sources, Nvidia has informed customers that production capacity may be limited for the time being.

Bloomberg pointed out that if the chip shortage continues, Chinese companies may choose domestic alternatives such as Huawei, Cambricon, or Alibaba.