Report: China could allow Alibaba, ByteDance to buy Nvidia's latest chip

A relaxation of China's position on buying Nvidia products would likely be seen as a slight positive for Nvidia and the wider AI supply chain. However, the report remains unverified, and the specific chip, the RTX Pro 5500, is a professional workstation component, not Nvidia's top AI accelerator, which limits the potential impact.

Initial market reactions are expected to appear in US index futures rather than cash equities, which are not trading. CME Globex resumes for the new week at 6pm US Eastern time (2200 GMT), and that reopening is usually the earliest opportunity for a headline such as this, along with the Hormuz and Iran developments, to be factored into equity index futures before Monday's cash session. Any confirmation or denial of the report, from either Beijing or Nvidia, would be the main catalyst for a more significant price move in either direction.

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According to an unverified report, China might be ready to allow Alibaba and ByteDance to purchase Nvidia's latest high-end chip, a step that some industry executives believe could bypass current US export regulations.

Summary of the reporting:

• The Information, citing two sources with knowledge of the situation, reported that the Chinese government has indicated it could permit domestic companies such as ByteDance and Alibaba to purchase Nvidia's RTX Pro 5500 chip.
• China's Ministry of Industry and Information Technology has, according to the report, requested that companies like ByteDance and Alibaba provide details of their purchasing plans for the chip, covering quantities and intended applications.
• The ministry has apparently informed some firms that it plans to approve the purchases.
• Some industry executives are believed to anticipate that the RTX Pro 5500 will fall outside the scope of existing US export controls.
• Reuters stated it was unable to independently confirm The Information's report.
• An Nvidia spokesperson indicated that US companies are still limited by a combination of outdated US export controls that apply to older gaming-era products and by China's own restrictions on US imports.
• US equity index futures resume trading for the week on CME Globex at 6pm US Eastern time (2200 GMT), providing the first opportunity for markets to incorporate this and other weekend news.

China could be moving to relax its position on Nvidia acquisitions, according to an unverified report from The Information. Citing two people with direct knowledge, the report stated that Beijing has indicated it might permit domestic firms, including ByteDance and Alibaba, to buy Nvidia's RTX Pro 5500 chip, a high-end component designed for professional workstation use rather than for Nvidia's leading AI accelerators.

The report stated that China's Ministry of Industry and Information Technology recently requested a group of companies, including ByteDance and Alibaba, to submit their purchase plans for the chip, including the intended quantity and usage. The ministry is reported to have told some firms that it plans to approve the purchases after receiving that information. Bloomberg, also drawing on The Information, noted that the RTX Pro 5500 was only launched this month and separately reported that the ministry asked the same purchase and usage details from companies considering the acquisition.

According to the report, some industry executives believe the RTX Pro 5500 may not be covered by current US export restrictions, which could provide Chinese companies with a way to obtain more advanced Nvidia hardware without violating existing controls. Reuters reported that it could not independently verify The Information's reporting.

In response to the report, an Nvidia spokesperson stated that US firms are still bound by a mix of outdated US export controls covering gaming products released roughly five years ago and by China's own restrictions on US imports. This comment highlights that Nvidia's access to the Chinese market has been influenced by limitations from both Washington and Beijing, amid broader strategic tensions over semiconductors and artificial intelligence. Bloomberg pointed out that the US administration has recently removed restrictions on some Nvidia chips, but those are typically older-generation products sold in low volumes, so the practical effect of that easing has been limited.

Since cash equities are not trading over the weekend, the initial market reaction to this report and other weekend news will be seen in index futures. CME Globex reopens for the week at 6pm US Eastern time (2200 GMT), providing traders with an early indication of how futures are positioned ahead of Monday's session.