Nvidia has faced a setback in the Chinese AI chip market as Huawei’s Ascend 910B outperformed the Nvidia H20 legal sanctions chip by about 10% in AI workloads, according to a report from Reuters. This has led Nvidia to lower the prices of the H20 by more than 10% in the Chinese market, impacting their revenue from data centers in China.
Despite the lower performance and pricing adjustments, Alibaba, an online marketplace, is still supporting Nvidia in China by ordering over 30,000 H20 chips. However, Beijing’s encouragement for Chinese companies to prioritize buying from Huawei first has posed a challenge for Nvidia in the market.
The cost of manufacturing the H20 is higher than the H100 due to its larger memory capacity, resulting in thinner profit margins for Nvidia. This, combined with the competitive market in China, has created obstacles for Nvidia’s success in the AI chip sector.
On a positive note, Nvidia has seen an increase in the supply of RTX gaming GPUs in China, with a reported 30% rise since May. While these GPUs are more consumer-oriented, they can also serve as AI accelerators for various users and small businesses.
Overall, the shift in the Chinese AI chip market highlights the impact of global politics on tech companies like Nvidia. Despite the potential for the H20 to outperform the Huawei 910B, challenges such as manufacturing costs and market competition have hindered Nvidia’s market dominance in China.
In conclusion, Nvidia’s struggles in the Chinese AI chip market underscore the importance of adapting to geopolitical dynamics and maintaining competitive pricing and performance to succeed in the highly competitive tech industry.
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https://www.tomshardware.com/tech-industry/nvidias-ai-chips-sales-in-china-hampered-by-us-sanctions-but-gaming-gpu-shipments-increase
