Chinese tech giant Alibaba is reportedly planning to purchase 40,000 to 50,000 of AMD's forthcoming MI308 AI accelerator chips, according to media reports. Valued at approximately $12,000 per unit, the potential order could be worth up to $600 million, indicating a significant commitment to securing AI computing power within U.S. export control frameworks.
The MI308 is a version of AMD's AI chip specifically designed for the Chinese market under U.S. export regulations. It received approval for sale to China alongside NVIDIA's H20 chip in July 2025, though AMD must pay the U.S. government a 15% fee on its sales revenue from these exports. This potential deal emerges as NVIDIA's H20 chip has reportedly faced procurement delays from major Chinese tech firms following security reviews, potentially creating a market opening for AMD's offering.
The AMD MI308 is positioned as a strong alternative. It boasts a significant 192GB of HBM3 memory, reportedly more than NVIDIA's H20, enabling it to handle large language models more efficiently. Furthermore, it is estimated to be priced about 15% lower than the H20 and has not been subject to the same public security concerns. While the more powerful NVIDIA H200 has also been cleared for export, the MI308's combination of high memory and competitive pricing makes it an attractive option for cost-conscious large-scale deployments.
This potential procurement underscores the explosive growth of China's AI chip market, which analysts forecast could reach $189 billion by 2029. This demand is fueling both imports from foreign vendors like AMD and the development of domestic alternatives from companies like Huawei, Cambricon, and Hygon.
ICgoodFind's Insight
Alibaba's reported large-scale interest in the AMD MI308 signals a strategic effort to diversify AI hardware sourcing amid geopolitical constraints. It highlights how performance-per-dollar and memory capacity are becoming critical decision factors in China's massive AI infrastructure build-out.
