Nvidia is cooking up a new, budget-friendly AI chip just for China after U.S. export rules put the kibosh on its pricier model. The new chip, part of Nvidia’s latest AI lineup, is set to roll out in June, according to Reuters on May 26.
This fresh chip will cost between $6,500 and $8,000, a steal compared to the $10,000 to $12,000 price tag of the recently restricted H20 model. The trick? Lower specs and simpler manufacturing mean it’s easier on the wallet but still ready to play in the big leagues.
An Nvidia spokesperson spilled the beans, saying the company’s options are pretty limited.
“Until we settle on a new product design and get the green light from the U.S. government, we’re basically locked out of China’s massive $50 billion data center market,” they said.
China is no small fry, it made up 13% of Nvidia’s sales last financial year. But U.S. export licenses became mandatory for those popular H20 chips in April due to fears the tech might end up powering a supercomputer in China.
Market Share Takes a Hit, But Earnings Expectations Stay High
Nvidia CEO Jensen Huang didn’t sugarcoat it: the company’s market share in China has nosedived from 95% pre-2022 (before U.S. restrictions) to just 50% now.
“We’re working hard to optimize products that follow the rules and keep serving China,” he said on Taiwanese TV last week.
This new chip is Nvidia’s third shot at a China-friendly design, built to meet U.S. bandwidth limits of 1.7 terabytes per second, basically, it’s a compliant underdog.
All eyes are on Nvidia’s earnings report, dropping May 28. After a 3% dip last week that ended four straight weeks of gains, analysts expect fireworks: a whopping $43.4 billion in revenue (up 66% year-over-year) and $21.3 billion in adjusted net income, per Investopedia.
Oppenheimer analysts remain optimistic, saying, “We see upside … despite losing H20 sales to China.”
Gunel Ismayilova
Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Please note that despite the nature of much of the material created and hosted on this website, HODL FM is not a financial reference resource, and the opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice. HODL FM strongly recommends contacting a qualified industry professional.
