Nvidia Eyes $12bn from AI Chips in China Amid US Controls!

  • Editor
  • July 5, 2024
    Updated
Nvidias-Bold-Move-12-Billion-AI-Chip-Bonanza-in-China-Despite-US-Clampdown

Key Takeaways:

  • Nvidia is set to earn $12 billion from AI chip sales in China in 2024.
  • Strict U.S. regulations restrict exporting high-performance AI chips to China.
  • Nvidia’s new H20 chip, designed to meet U.S. regulations, is key to these sales.
  • Over one million H20 chips will be shipped to China.
  • Nvidia’s revenues from China and Hong Kong grew over 50% year-on-year.

Nvidia, the leading semiconductor company based in Silicon Valley, is expected to generate $12 billion in revenue from AI chip sales in China this year.

This development comes amid stringent U.S. export controls aimed at restricting China’s access to advanced semiconductor technology.

Due to concerns about their potential military applications, the U.S. government has implemented export controls to limit the export of high-performance AI chips to China.

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These restrictions initially targeted Nvidia’s A100 and H100 chips, which were later expanded to cover newer models. In response, Nvidia introduced the H20 chip, designed to comply with U.S. regulations while meeting the performance needs of its Chinese customers.

The H20 chip, priced between $12,000 and $13,000 per unit, is expected to play a significant role in Nvidia’s projected revenue. The company plans to ship over one million units of the H20 chip to China, generating sales highlighting the strong demand for Nvidia’s products.

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This demand persists despite the H20’s reduced performance compared to Nvidia’s top-tier chips available in the U.S. Chinese artificial intelligence (AI) development institutions continue to show high interest in Nvidia’s offerings.

The company’s extensive ecosystem and software compatibility are critical factors that make transitioning to alternative products more challenging and costly for many Chinese AI companies. This compatibility has reinforced Nvidia’s market presence in China.

China accounted for approximately 9% of Nvidia’s total revenue in the most recent quarter, a decrease from 22% in the same period last year.


Despite this, Nvidia’s revenues from China and Hong Kong grew by over 50% year-on-year to $2.5 billion, driven by the strong demand for AI chips.

For the financial year ending January 2024, Nvidia’s total revenue from its China business, which includes graphics chips for PC gamers and other products, was $10.3 billion.

The Biden administration’s continued scrutiny and potential for further restrictions pose ongoing challenges for Nvidia.

U.S. Secretary of Commerce Gina Raimondo has indicated that “new products that are redesigned from regulated products will be immediately subject to additional restrictions.”

This implies that future iterations of the H20 or similar products might face further regulatory hurdles. Nvidia’s strategic adaptations and commitment to innovation have been crucial in navigating these challenges.

The company’s efforts to serve its customers in China and its robust product offerings are expected to help sustain its growth despite geopolitical tensions.


Nvidia’s anticipated $12 billion revenue from AI chip sales in China this year highlights the company’s strategic resilience and ability to navigate complex regulatory environments.

As Nvidia continues to adapt to the evolving geopolitical landscape, its performance in the Chinese market will remain a key indicator of its overall success.

Other Nvidia News:

For more news and trends, visit AI News on our website.
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Dave Andre

Editor

Digital marketing enthusiast by day, nature wanderer by dusk. Dave Andre blends two decades of AI and SaaS expertise into impactful strategies for SMEs. His weekends? Lost in books on tech trends and rejuvenating on scenic trails.

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