David Edwards
In response to tighter U.S. export regulations that have limited sales of its high-performance models, Nvidia Corp. is getting ready to launch a new range of less expensive AI processors designed for the Chinese market. The new chips are expected to go into mass manufacturing in June, according to sources that Reuters cited.
The upcoming chip is anticipated to retail for $6,500 to $8,000, which is far less than the $10,000 to $12,000 price tag of Nvidia’s restricted H20 model. It is made to comply with existing U.S. export rules. The simplified manufacturing procedures and reduced specs constitute a calculated concession meant to preserve a presence in China’s $50 billion data center industry.
“Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China’s $50 billion data center market,” an Nvidia spokesperson told Reuters.
With over 13% of its revenues in the most recent fiscal year, China continues to be a vital source of income for Nvidia. However, the company’s foothold in the region has been negatively impacted by waves of U.S. export prohibitions. According to Nvidia CEO Jensen Huang, the company’s market share in China has decreased from 95% before 2022 to roughly 50% at this time.
This is the third time Nvidia has tried to design AI processors that comply with US export regulations. In order to avoid any military or supercomputing uses in China, the new chip complies with the required bandwidth cap of 1.7 terabytes per second.
The geopolitical environment has intensified the competition between Nvidia and Huawei, a Chinese rival. According to reports, the tech giant based in Shenzhen is nearing the end of testing its newest AI processor, the Ascend 910D, which is anticipated to compete with Nvidia’s products in the local market.
Nvidia’s most recent product plan was announced just before the company’s expected quarterly earnings report, which is scheduled for May 28. With high expectations, Wall Street is keeping a careful eye on the results. Analysts predict an adjusted net income of $21.3 billion and quarterly revenue of $43.4 billion, which is 66% higher than the previous year.
