Nvidia is preparing to roll out a new, more affordable AI chip specifically designed for the Chinese market, as ongoing U.S. export restrictions continue to block the company’s high-end models from reaching the region.
According to a May 26 report by Reuters, citing sources close to the matter, Nvidia is expected to begin mass production of this new chip in June. The chip, which is a component of the company’s most recent generation of AI processors, is expected to cost between $6,500 to $8,000, which is a significant decrease from the price of the now-restricted H20 model costs between $10,000 and $12,000.
Nvidia is still navigating a small number of solutions, according to a company representative. The representative stated, “We are essentially shut out of China’s $50 billion data center market until we agree on a new product design and get the U.S. government’s approval.”
China has been a major market for Nvidia, accounting for 13% of its sales in the last financial year. However, recent moves by the U.S. government have further tightened restrictions. In April, officials informed Nvidia that it would need export licenses to ship its H20 chips to China, citing national security concerns over their potential use in Chinese supercomputers.
Nvidia’s market share in China has suffered greatly as a result of these actions. CEO Jensen Huang reported that today’s rate is only 50%, down from 95% in 2022.
Source: Yahoo/TVBS
In the meantime, Nvidia’s main rival in the area is the Chinese tech behemoth Huawei. The company’s AI chip, the Ascend 910D, is now being tested and is ready for release.
Nvidia earnings eagerly awaited
This upgrade comes just a few days before the highly anticipated May 28 release of Nvidia’s earnings report. The company’s stock ended last week down roughly 3% after four weeks of rises.
Still, expectations remain high. Analysts predict $43.4 billion in quarterly revenue — up 66% year-over-year — and adjusted net income of $21.3 billion, according to Investopedia.
“We see upside … despite the loss of H20 sales to China,” noted analysts at Oppenheimer, signaling continued investor confidence in the chipmaker’s broader strategy.
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