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Nvidia 'cutting prices on China-targeted AI chips'

Sources say competition from local Chinese firms has forced Nvidia to reduce the prices of its H20 chips, which it developed to avoid US export sanctions.

Reports in the South China Morning Post say the H20 has got off to a weak start, with abundant supply and local competition forcing Nvidia to price it below products offered by Huawei Technologies and others.

Nvidia dominates the global market for AI semiconductors, but is forbidden from selling its most advanced products – such as the A800 and H800 – to China. To mitigate this, it introduced three chips tailored for China late last year: the H20, L20 and L2.

But the news stories suggest that the H20 chips are being sold at a 10% discount compared to Huawei’s Ascend 910B – the most powerful AI chip from a Chinese company. The report claims that, in the past six months, just five state or state-affiliated buyers have expressed interest in purchasing H20 chips, compared with more than a dozen for Huawei’s 910B in the same period.

The rumours should concern Nvidia. During the firm’s first-quarter earnings last Wednesday, executives warned that the company’s business in China is “substantially” lower than in the past owing to US sanctions. The Chinese market contributed 17% of its revenue for fiscal 2024.


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June 13 2024 1:49 pm V22.4.55-1