Chinese tech giants boosted Nvidia GPU purchases by 4x to 6x during Q1

Chinese tech giants have collectively spent over $16 billion on Nvidia's H20 data center GPUs for AI so far this year, according to Reuters, which cites a report from The Information. Chinese companies increased their spending on Nvidia GPUs despite the expected 'DeepSeek impact' and unused AI infrastructure in China. This likely happened as a response to the AI diffusion rule proposed by the previous U.S. government that bans Chinese entities from buying American AI GPUs starting in May.

Alibaba Group, ByteDance, and Tencent Holdings led the purchasing spree, placing large-scale orders in the first quarter of the year. H3C, one of the leading server makers in China, even raised concerns about possible Nvidia GPU shortages last week as it could not get what it demanded.

$16 billion per first quarter is a lot of money. Nvidia reported $17.11 billion in earnings from China and Hong Kong in fiscal year 2025 (ended on January 28, 2025), so last year, the company earned approximately $4.27 billion per quarter on average selling GPUs to Chinese customers. So, big Chinese companies quadrupled their purchases of Nvidia's H20 GPUs for AI applications in the first quarter of calendar 2025.

However, Chinese tech giants accelerated their purchases of Nvidia hardware from quarter to quarter. Hence, comparing $16 billion of its alleged sales to Chinese clients in Q1 2025 to its sales to Chinese customers in Q1 2024 makes sense. Unfortunately, Nvidia's China revenue in calendar Q1 2024 is something hard to estimate (as Nvidia's fiscal first quarter ends in late April), though based on Nvidia's filings with the Security and Exchange Commission, it is safe to say that we are dealing with a sum of around $2.4 billion – $2.5 billion. This essentially means that Chinese tech giants increased purchases of Nvidia's H20 GPUs in Q1 2025 by over six times compared to Q1 2024.

However, there is a catch. Nvidia's sales to entities in Singapore increased by over 10 times in fiscal 2025 compared to fiscal 2023, from $2.288 billion in FY2023 to $23.684 billion in FY2025. Many observers believe that GPUs sold to Singapore entities are smuggled to restricted countries, such as China. To that end, it is hard to estimate how many GPUs Chinese entities actually obtain every quarter.