Tencent claims to have stacked up Nvidia processors but is looking for Chinese alternatives.

Tencent was currently looking for additional Chinese suppliers “for these training chips,” he continued.

Lau did not say when the transaction occurred, but according to Nvidia’s October regulatory filings, the H800 is one of the goods that cannot be sold to China as a result of the US export restrictions that were imposed last month. One of the company’s cutting-edge artificial intelligence processors, it is intended for usage in data centers—physical locations where vast amounts of electronic data are kept.

Nvidia revealed in late October that the recently announced limitations had taken effect “immediately,” many weeks ahead of schedule.

Over the past year, tensions between the United States and China have escalated, particularly in the realm of advanced semiconductors, materials, and equipment needed for technology development. Washington’s decision to restrict the types of semiconductors that American companies can export to China last month further tightened export controls initially imposed in October 2022 on national security grounds. The Biden administration views these measures as necessary to prevent potential military use of hardware and close regulatory loopholes. In response, Beijing has accused Washington of weaponizing trade and technology issues. This situation has prompted various Chinese companies, including Kai-Fu Lee’s 01.AI startup, to stockpile chips for future needs.

The company started building its chip stock earlier this year, even borrowing money from Sinovation Ventures, Lee’s venture capital firm, since “we felt we had to,” he told the media outlet in an interview. An inquiry about the situation for comments was not answered by the venture capital business.

The practice of stockpiling chips is not a new phenomenon. Huawei, the Chinese tech giant, also stockpiled a two-year supply of chips before facing severe trade restrictions from the US in 2020, as reported by the Center for Strategic and International Studies. China’s leading chipmaker, Semiconductor Manufacturing International Corporation (SMIC), has similarly accumulated a significant number of machines and potentially a substantial stockpile of spare parts.

While the current US export ban does not immediately impact Tencent’s development of Hunyuan and its AI capabilities, the company is concerned about its ability to resell components to other customers, especially regarding its AI bot. In response, Tencent is exploring ways to enhance the efficiency of its AI chip usage, with a focus on retaining most of the high-performance chips for training the model.

Tencent launched Hunyuan in September, describing it as a platform that embodies the idea of being all-encompassing and limitless. It is designed primarily for corporate users, offering features such as automated meeting summaries and improved document creation efficiency.

Currently, Hunyuan is available on a limited basis to both customers and the general public, as stated by Tencent.

The company reported strong earnings for the quarter ending in September, with a 10% increase in revenue that met analyst expectations. Revenue reached 154.6 billion yuan ($21.3 billion) compared to the same period the previous year, and profit attributable to shareholders rose by 39% to 44.9 billion yuan ($6.2 billion).