Why is no one talking about this?
$NVDA 🖥
Imagine a store that receives an order worth about a third of everything it expects to sell in a quarter and tells the customer:
"But we don't have enough goods to supply you..."
This is exactly what is happening to Nvidia in China right now.
And the reason is more interesting than the number itself:
A few days ago, an exclusive Reuters report reached us:
"ByteDance, Alibaba, and Tencent ordered more than 3 million of Nvidia's new RTX PRO 5500 cards, for a total price of over $35 billion," at about $11,400 per card.
According to sources: the total orders from customers in China exceeded 6 million cards.
Nvidia's answer?
According to the report, it cannot guarantee that it will supply the goods.
One source said that Chinese customers might receive only 10% of the quantity they requested!
Another source: Nvidia said it would be able to produce no more than 3 million such cards worldwide by 2027.
To understand what is actually happening here, one must first understand: why is China specifically requesting this card?
Because it is the only chip it is allowed to request.
Nvidia's powerful chip for data centers, the B300, is forbidden for sale to China under US export rules, and the H200 is undergoing individual approval (after Xi Jinping's request in the US).
The RTX PRO 5500 is a workstation card, weaker, but still one of the strongest that Chinese buyers can obtain.
And they don't need it to train models, but to run models that have already been trained,
to answer every question a user sends to a chatbot; each additional user is more computing power.
And now for what's happening behind the scenes:
From 2027, Nvidia is expected to shift a large part of its capacity at TSMC to the Rubin platform, the next generation of data center chips, and not to cards like the RTX PRO 5500.
And two small details that tell the whole story:
The price in the Chinese market of the RTX 6000D, the previous restricted card that was discontinued, has doubled.
A company traded in China, Tansun Technology, announced on 13.10 that it is buying 20,000 cards and warned that the shortage might delay supply.
And why are we telling you this?
In the guidance published by Nvidia, China is absent. 🔎
In the report from 26.8, the company projected revenue of $108 billion for the quarter and explicitly stated that it does not assume any revenue from data center computing from China in its guidance...
The order from the three companies alone is worth about a third of this guidance for the quarter...
You understand what this means, right? 💡