Alibaba, Tencent could invest $2b in Nvidia chips: report

China internet powers may take advantage of projected AI chip availability.

Alibaba and Tencent could spend more than $2b on Nvidia H200 chips next year if planned easing of US restrictions are implemented, S&P Global Ratings said.

China’s internet giants are projected to accelerate their AI related investments if Nvidia is allowed to sell H200 chips to the country after US President Donald Trump’s announcement to lift the export ban on the chips but with the 25% fee stipulation.

"U.S. internet companies spend 10x more than their Chinese counterparts on AI chips and AI infrastructure,” stated in S&P Global Ratings report "Easing Chip Controls Could Spur Spending Surge For Chinese Internet Issuers."

“We believe that U.S. export restriction on advanced AI chips is the major factor in this difference and the lifting of restrictions will lead to higher AI-related spending for Chinese internet firms," said S&P Global Ratings credit analyst Clifford Kurz.

Alibaba and Tencent could each incur a minimum of $1m-$2m in 2026 and 2027 depending on the availability of the chips, not counting other budgeted expenditures.

Potential higher spending could be on the cards if Nvidia raises prices to offset the additional 25% fee payable to the US government.