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- Nvidia’s AI chip going to China will be offered for $6,500 to $8,000, much cheaper than the $10,000 H20 version.
- China’s market share has dropped from 95% to 50% because of America’s continued export restrictions on advanced chips.
- Huawei’s upcoming Ascend 910D AI chip has increased the competition for the Chinese company.
Nvidia is readying a new version of its AI chip which will sell at a lower price in China. The decision was made after the U.S. government put limits on exporting advanced chips, including the H20 model. According to Reuters, the new chip costs between $6,500 and $8,000, making it cheaper than the $10,000 to $12,000 priced models sold by rival Nvidia.
The new chips will enter mass production in June. Nvidia will introduce these in its new AI line, with specifications and production needs that are easier compared to previous chips.A spokesperson for Nvidia indicated that the firm is still looking at options and it cannot gain access to China’s $50 billion data centre market until permitted by the U.S. government.
Nvidia Faces Export Challenges
China has long played a key role for Nvidia, contributing 13% of the company’s sales last year. However, Nvidia’s market share in the region has been greatly reduced because of the restrictions. Jensen Huang, Nvidia’s CEO, stated that their market position in China was over 95% before 2022, but is now around 50%. He underlined that the company was still focused on making compliant products for the Chinese market.
Source: Yahoo/TVBS
Nvidia’s H20 chips were initially covered by export licenses from the U.S. government in April. The government stated that it was concerned the technology could help China improve their supercomputing capabilities. The purpose of these restrictions is to help prevent the country from using advanced technology. As a result, Nvidia is developing chips that meet U.S. rules and this new AI chip is its third effort in that direction.
Huawei, a leading technology company from China, is preparing to release its own AI chip, the Ascend 910D. The progress Huawei is making in AI chips may threaten Nvidia’s presence in China. As Nvidia tackles these problems, its main priority is to keep growing in the fast-changing AI sector.
Last week, the company’s share price fell by 3%, after posting gains for the previous four weeks. The report comes only a few days prior to the company announcing its quarterly earnings on May 28. Analysts expect the company to see a 66% jump in revenue from the year before, up to $43.4 billion and adjusted net income of $21.3 billion, as reported by Investopedia.
