"China Plans to Allow Purchases of NVIDIA's New Chips"... An Opportunity for NVIDIA to Return to China's AI Market After a Year

[Financial News] China's government has told domestic companies, including ByteDance and Alibaba Group, that it plans to approve their purchases of NVIDIA's new artificial intelligence (AI) chip, the RTX Pro 5500, The Information reported on the 27th (local time), citing two sources.
According to the report, China's Ministry of Industry and Information Technology asked the companies to report the quantities of the RTX Pro 5500 they wanted to purchase and their intended uses ahead of President Xi Jinping's visit to the United States on the 24th. The ministry also told some companies that the government planned to approve their purchases. 
The timing of the approval and the quantity allowed remain unclear.
The RTX Pro 5500 is a workstation chip designed for engineers and designers, but it is well suited to running AI models. Chinese companies therefore plan to deploy it in servers.
The chip sells for 85,000 to 90,000 yuan in China, equivalent to about 17 million to 18 million won.
ByteDance is considering ordering about 1 million units, the sources said.
NVIDIA plans to ship about 500,000 units per quarter to China starting in late December. The Information reported that the company told customers they would need to place orders by September 30 to secure supplies.
NVIDIA's business in China has been blocked by the governments of both the United States and China.
The U.S. government has barred sales of NVIDIA's high-performance AI chips to China to curb the development of China's AI industry, allowing sales only of older chips such as the H200.
The Chinese government has also effectively banned domestic companies from purchasing NVIDIA's high-performance chips to support domestic chip suppliers and address concerns about data leaks. It has taken an even stricter stance toward NVIDIA chips designed specifically for China.
Chinese authorities are reconsidering restrictions on NVIDIA chip purchases because chip supplies have been unable to keep pace with the rapid expansion of AI services. Eric Xu, Huawei's rotating chairman, said on the 18th, "We do not plan to make a full-scale entry into overseas markets because we lack the production capacity even to meet demand in China."
The U.S. government has not publicly stated whether it will exclude the chip from export controls, but some industry executives believe it will, The Information reported.
If the purchase of the new chips is approved, NVIDIA will have an opportunity to regain momentum in China's AI market after more than a year and keep Chinese developers on its platform.
NVIDIA CEO Jensen Huang has said that the company's share of China's high-performance AI chip market fell from 95% to 0% because of U.S. export controls.

[email protected] Lee Seok-woo, international affairs specialist Reporter