ByteDance, Alibaba and Tencent place more than $35 billion of Nvidia chip orders

ByteDance, Alibaba and Tencent have placed more than $35 billion worth of Nvidia chip orders, Reuters reported in an exclusive^1,2. Reuters described the chip involved as among the most powerful of Nvidia’s AI processors^1,2.

Reuters quoted a statement that “US firms continue to be restricted by a combination of outdated US export controls”¹. The export controls in question are overseen by the US Commerce Department’s Bureau of Industry and Security².

Why it matters to investors

Orders on this scale arrive after a rough stretch for the sector. Interactive Brokers noted that chip stocks had declined for nine straight days, their longest losing streak since 2006, and asked under the headline “Are Companies Reducing AI Spending? Chip Orders Say Otherwise” whether the selling matched demand⁴. On Monday chip stocks jumped 4% to 7% as China’s 4.5% third-quarter GDP figure beat expectations and lifted risk assets, Crypto Briefing reported⁵.

The orders also add a Chinese leg to a demand picture dominated by the US cloud companies. Electronics Weekly reported that combined capital spending by the world’s nine leading cloud providers is projected to surge 106% to $957 billion in 2026 and to $1.5 trillion in 2027⁹. Kalkine reported that AI clouds and enterprises are now almost as large a revenue channel for Nvidia as the hyperscalers, from which Nvidia’s revenue was $48.7 billion last quarter⁸.

The policy backdrop is unsettled. Politico reported that OpenAI, which once pushed to keep AI chips from China, is now staying quiet, a retreat it called a boon for Nvidia as the chipmaker fights new restrictions³. ChinaTalk described a “cannonball-sized hole in US export controls”, writing that China imported roughly 90 immersion lithography systems a year⁷.

What to watch

Washington is signalling that it will use export controls more broadly. Pentagon under secretary Emil Michael told The Information that export controls can be used to rein in AI labs⁶. The South China Morning Post reported that the US sanctioned five Chinese entities over the theft of AI trade secrets by a former Google engineer, noting that high-performance chips are already subject to export controls¹⁰.

For Nvidia shareholders, the question is whether the Bureau of Industry and Security, which oversees these controls, lets the orders through². Interactive Brokers’ argument that chip orders, rather than chip stocks, tell the story depends on that answer^1,4.