Chinese AI developers are facing a significant shortfall in their orders of advanced Nvidia Corp. chips, as the US company grapples with production constraints amid surging demand. Alibaba Group Holding Ltd., Tencent Holdings Ltd., ByteDance Ltd., and other major Chinese AI and cloud firms have collectively placed orders for about 6 million of Nvidia’s RTX Pro 5500 chips. However, these companies anticipate receiving only tens of thousands of units, roughly 1%, over the next four months.
The discrepancy highlights the challenges Nvidia is encountering in scaling up production to meet the explosive demand for its high-performance chips. The limited supply is expected to impact the rollout of AI projects and cloud services in China, where these chips are crucial for advancements in artificial intelligence.
The people familiar with the matter, who spoke on condition of anonymity, emphasized the private nature of the discussions. The situation underscores the broader tensions in the tech supply chain, particularly between US and Chinese companies, as geopolitical factors continue to influence the availability of critical components.