ByteDance becomes unexpected nvidia gpu supplier to tencent and alibaba
Beijing, Tuesday, 29 April 2025.
Amidst export restrictions, tencent and alibaba are reportedly turning to bytedance for nvidia gpus to fuel their ai development. ByteDance, which has close to 1 million cards, may be a top-tier player in computing resources. The deal involves nvidia h20 cards, with tencent utilizing these for its yuanbao ai platform. This highlights the intense demand for nvidia chips in china, despite growing domestic alternatives. The value of gpus bytedance stocked last year is estimated at 100 billion yuan.
Nvidia’s market position
Nvidia’s (NVDA:NASDAQ) market position remains strong despite challenges [GPT]. Chinese tech giants are still seeking its chips, indicating Nvidia’s competitive advantage in the AI sector [1]. Even with export restrictions and the rise of domestic alternatives, the demand persists [1][2]. This demonstrates Nvidia’s crucial role in enabling AI development for major players like Tencent and Alibaba [2]. The ongoing demand could positively influence Nvidia’s revenue potential, as companies are willing to seek alternative channels to acquire their GPUs [1].
Financial implications for nvidia
The transactions highlight Nvidia’s revenue potential, even with restrictions [2]. Chinese firms, including ByteDance, Alibaba, and Tencent, reportedly ordered $16 billion worth of Nvidia H20 chips in early 2025 [2][alert! ‘This figure is not confirmed and conflicts with other figures in the article.’]. This indicates a strong demand for Nvidia products despite regulatory hurdles [2]. If ByteDance’s inventory is worth approximately 100 billion yuan, this equates to roughly $13.8 billion, [alert! ‘using current exchange rates, but this is an estimate and not directly from the source’] suggesting significant potential revenue for Nvidia if similar transactions occur [1][2].
Competitive landscape and export controls
The U.S. government’s export controls on Nvidia’s H20 chip, specifically designed for the Chinese market, add complexity [2]. These restrictions, implemented in April 2025, require licenses for export, potentially impacting Nvidia’s sales in China [2]. However, the continued efforts by Chinese companies to obtain Nvidia chips, even through indirect means, underscore the limited success of these controls [1]. This situation may also incentivize the development of domestic GPU alternatives, posing a long-term competitive challenge to Nvidia [1].
Tencent’s ai strategy
Tencent’s increased investment in AI computing power aims to enhance user experience [2]. The company wants to avoid service interruptions and retain its large user base [2]. Tencent reportedly purchased approximately 2 billion yuan worth of Nvidia H20 cards and servers from Bytedance [1][2]. This purchase supports updates to Tencent’s Yuanbao AI platform [1]. This strategic move reflects the critical importance of AI capabilities for maintaining competitiveness among China’s tech giants [2].