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Nvidia cuts prices on AI chips for China amid heated domestic competition with Huawei, sources say
- Nvidia’s H20 chip is being sold in some cases at more than a 10 per cent discount in China, compared to Huawei’s Ascend 910B, sources said
- Senior Nvidia executives warned that the company’s business in China is ‘substantially’ lower than in the past because of US sanctions
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Nvidia’s most advanced artificial intelligence (AI) chip it developed for the China market has got off to a weak start, with abundant supply forcing it to be priced below a rival semiconductor from Huawei Technologies, according to sources familiar with the matter.
The flattening prices underscore the challenges Nvidia’s China business faces amid US sanctions on AI chip exports and heightened competition, casting a cloud over its future in a market that contributed 17 per cent to its revenue for fiscal 2024.
The growing competitive pressure in China also adds a cautionary note to investors in the US semiconductor design firm, as its shares extended a stunning rally following Wednesday’s bumper revenue forecast.
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Nvidia, which dominates the global market for AI semiconductors, introduced three chips tailored for China late last year after US sanctions prevented the company from exporting its most advanced graphics processing units (GPUs).
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Among those chips, the H20 is the most closely watched as it is the most powerful Nvidia product sold in China, but the three supply chain sources told Reuters there is an abundant supply of that product in the market, signalling weak demand.
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