Nvidia's AI Chip for Chinese Market Faces Challenges

TapTechNews May 24th news, according to Reuters citing informed sources, Nvidia's AI chip developed for the Chinese market has a weak start and abundant supply, and has begun to lower its prices under the competition of Huawei, and in some cases the pricing is already lower than that of Huawei chips.

It is reported that the Chinese market accounts for 17% of Nvidia's fiscal 2024 revenue, and the growing competitive pressure has also sounded the alarm for Nvidia's investors.

Nvidia launched three chips specifically tailored for the Chinese market at the end of last year, among which the most powerful H20 chip has attracted much attention. Three supply chain sources said that the supply of this chip in the market is abundant, indicating weak demand.

Two of the three sources said that the selling price of the H20 chip is in some cases more than 10% cheaper than that of Huawei's Ascend 910B. Due to the sensitivity of the problem, the two sources refused to disclose their names.

Analysts said that although Nvidia is trying to seize a market share that it cannot afford to lose, the outlook is increasingly uncertain.

Huawei only began to challenge Nvidia last year, and sources said that the company will significantly increase the shipments of its Ascend 910B chip this year, and this chip is superior to H20 in some key indicators.

Huawei did not immediately respond to a request for comment.

According to a Reuters investigation of existing government procurement data, in the past six months, only five national or state-affiliated buyers have expressed interest in buying the H20 chip, while there are more than a dozen buyers of Huawei's 910B in the same period.