Alibaba, Tencent, and ByteDance seek long-term memory deals with Samsung and SK Hynix

China’s three largest internet companies are trying to lock down the memory chips that power AI servers, and they are reportedly willing to sign up for a very long time to get them.

Alibaba, Tencent, and ByteDance are negotiating long-term supply agreements with Samsung Electronics and SK Hynix for DDR5 and LPDDR5 memory. The goal is to feed a fast-growing buildout of AI data centers. The catch is that much of what they want has already been spoken for.

What the Chinese giants are asking for

The talks center on two kinds of memory. Server-grade DDR DRAM is the workhorse memory sitting next to processors in data center machines. LPDDR is the low-power variant, built to do similar work while drawing less electricity.

What stands out is the contract length. The Chinese firms are reportedly seeking deals stretching as far as 2035. Industry norms for these long-term agreements, known as LTAs, typically run 3-5 years.

The three companies are also reportedly prepared to pay premiums to guarantee reliable supply.

Why supply is so tight

The scramble makes more sense once you see the queue. US hyperscalers, including AWS, Microsoft, Google Cloud, and Meta, have already secured substantial memory supplies for their own AI servers.

Those earlier commitments have absorbed most of the available LTA capacity. That leaves Chinese buyers competing for whatever volume remains.

The numbers are stark. An estimated 70-80% of Samsung and SK Hynix’s 2027 production is already committed to existing long-term agreements. Samsung plans to allocate at least 70% of its memory output to LTAs.

Demand from China is not small, either. The country has the world’s second-largest AI data center pipeline, estimated at over 24 GW.

According to SemiAnalysis data, ByteDance is advancing approximately 5.3 GW of AI data center capacity. Alibaba is at 3.9 GW, and Tencent is at 2.4 GW.

The GPU bill is already in

Memory is only one part of the shopping list. The three Chinese firms recently placed combined orders exceeding $35 billion for Nvidia GPUs to support their AI expansion.

Securing DRAM supply is the logical next step once the processors are on order.

What this means for memory makers and the AI race

For Samsung and SK Hynix, the negotiations put them in an enviable position. They have more customers asking for long-term volume than they can comfortably serve.

Memory has historically been a boom-and-bust business, with prices swinging hard between shortage and glut. Contracts reaching toward 2035 would give the suppliers unusual visibility into future revenue, which is rare in this corner of the chip market.

For the Chinese platforms, the stakes are about keeping pace. Their US rivals moved first and claimed the bulk of available capacity. ByteDance, Alibaba, and Tencent are now trying to make sure their data center plans are not stalled by a memory bottleneck.

With over 24 GW of AI data center capacity in the works, demand for memory is likely to keep pressing against supply that has largely been pre-sold.