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The Hindu
5 days ago
- Business
- The Hindu
Nvidia to launch cheaper Blackwell AI chip for China after U.S. export curbs
Nvidia will launch a new artificial intelligence chipset for China at a significantly lower price than its recently restricted H20 model and plans to start mass production as early as June, sources familiar with the matter said. The GPU or graphics processing unit will be part of Nvidia's latest generation Blackwell-architecture AI processors and is expected to be priced between $6,500 and $8,000, well below the $10,000-$12,000 the H20 sold for, according to two of the sources. The lower price reflects its weaker specifications and simpler manufacturing requirements. It will be based on Nvidia's RTX Pro 6000D, a server-class graphics processor, and will use conventional GDDR7 memory instead of more advanced high bandwidth memory, the two sources said. They added it would not use Taiwan Semiconductor Manufacturing Co's advanced Chip-on-Wafer-on-Substrate (CoWoS) packaging technology. The new chip's price, production timing and above details have not previously been reported. The three sources Reuters spoke to for this article declined to be identified as they were not authorised to speak to media. An Nvidia spokesperson said the company was still evaluating its "limited" options. "Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China's $50 billion data center market." TSMC declined to comment. China remains a huge market for Nvidia, accounting for 13% of its sales in the past financial year. It's the third time that Nvidia has had to tailor a GPU for the world's second-largest economy after restrictions from U.S. authorities who are keen to stymie Chinese technological development. Nvidia's new GPU, despite its much weaker computing power compared to the H20, is expected to keep the company competitive despite the loss of substantial market share thus far due to export restrictions. Its main rival in China is Huawei which produces the Ascend 910B chip. "Domestic Chinese technologies like Huawei are expected to catch up with the computing performance of downgraded versions within one to two years," said Nori Chiou, an expert in semiconductors and investment director at Singapore-based White Oak Capital Partners. Nvidia's "remaining edge lies primarily in its ability to integrate AI clusters with its CUDA platform," he added. CUDA is the company's programming architecture engineers use to build their AI models and apps on its GPUs. Its broad use and the ecosystem built around it makes developers keen to stick with Nvidia. ANOTHER CHIP Nvidia's market share in China has plummeted from 95% before 2022, when U.S. export curbs that impacted its products began, to 50% currently, Nvidia CEO Jensen Huang told reporters in Taipei last week. Huang also warned that if U.S. export curbs continue, more Chinese customers will buy Huawei's chips. According to two of the sources, Nvidia is also developing another Blackwell-architecture chip for China that is set to begin production as early as September. Reuters was not immediately able to learn the specifications of that variant. After the U.S. effectively banned the H20 in April, Nvidia initially considered developing a downgraded version of the H20 for China, sources have said, but that plan didn't work out. Huang has said the company's older Hopper architecture - which the H20 uses - can no longer accommodate further modifications under current U.S. export restrictions. Reuters was unable to determine the final name for the new GPU to be launched as early as June. Chinese brokerage GF Securities said in a note published last week that it would likely be called the 6000D or the B40, though it did not disclose pricing or cite sources for the information. The H20 ban forced Nvidia to write off $5.5 billion in inventory and Huang told the Stratechery podcast last week that the company also had to walk away from $15 billion in sales. The latest export restrictions introduced new limits on GPU memory bandwidth - a crucial metric measuring data transmission speeds between the main processor and memory chips. This capability is particularly important for AI workloads that require extensive data processing. Investment bank Jefferies estimates that the new regulations cap memory bandwidth at 1.7-1.8 terabytes per second. That compares with the 4 terabytes per second that the H20 is capable of. GF Securities forecast the new GPU will achieve approximately 1.7 terabytes per second using GDDR7 memory technology, just within the export control limits.
Yahoo
16-04-2025
- Business
- Yahoo
Nvidia's $18B China Meltdown Could Be Huawei's Big Break
Nvidia (NASDAQ:NVDA) just hit a regulatory brick wall in Chinaand the timing couldn't be worse. The U.S. government quietly informed the company on April 9 that its H20 chip, the flagship AI product tailored for the Chinese market, would now require an export license. Nvidia didn't go public with the news until a week later, leaving some of its largest Chinese clients in the dark. Internally, even Nvidia's own China sales team wasn't fully looped in. The fallout? A nasty $5.5 billion write-down tied to inventory, purchase commitments, and reservesand roughly 6.5% premarket drop in Nvidia stock at 7.48am today. Warning! GuruFocus has detected 3 Warning Signs with NVDA. The H20 chip was Nvidia's last legal lifeline into China after Washington tightened the screws on AI chip exports back in 2022 and again in 2023. Since then, Nvidia had racked up a staggering $18 billion in orders for the H20, thanks to demand from heavyweights like Tencent (TCEHY), Alibaba (NYSE:BABA), and ByteDance. All were ramping up purchases to fuel a new generation of affordable AI models. But the surprise move by U.S. officialsnow confirmed to be indefiniteleaves those orders in limbo, as the chip world scrambled for alternatives. And that's where Huawei comes in. By shutting Nvidia's last open door, U.S. regulators may have just handed a golden opportunity to China's most advanced domestic AI chipmaker. Huawei's Ascend series is gaining traction, and analysts say the clampdown could accelerate customer migration. By restricting the H20 system, the U.S. is basically pushing Nvidia's Chinese clients straight into Huawei's arms, said Nori Chiou of White Oak Capital. In trying to slow down China's AI rise, Washington may have accidentally stepped on the gas. This article first appeared on GuruFocus. Sign in to access your portfolio
Reuters
16-04-2025
- Business
- Reuters
Exclusive: Nvidia kept some China customers in the dark about new US chip clampdown, sources say
SINGAPORE, April 16 (Reuters) - Nvidia (NVDA.O), opens new tab did not warn at least some major customers in advance about new U.S. export rules it was told about a week ago requiring it to obtain licenses to sell its China-focused artificial intelligence chip, according to two sources familiar with the matter. The U.S. chipmaker disclosed on Tuesday that American officials had informed the company on April 9 that its H20 chip would require an export license for sales to China. The move to restrict H20 shipments marks Washington's latest effort to limit China's access to advanced semiconductors, as the United States seeks to maintain its edge in AI technology. Major Chinese cloud companies were still anticipating H20 deliveries by year-end, unaware of the impending restrictions, according to the two sources, who said Nvidia's China sales team also did not appear to be informed ahead of the public announcement. They spoke on condition of anonymity because of the sensitivity of the matter. Nvidia declined to comment. The export controls threaten Nvidia's business in China, one of its largest markets. Nvidia had secured $18 billion of H20 orders since the start of the year, according to one of the two sources and a third source. China generated $17 billion in revenue, or 13% of Nvidia's total sales, in its last fiscal year that ended on January 26. Nvidia shares fell 6% in after-hours trading on Tuesday after it said it would take up to $5.5 billion of charges in the first quarter ending April 27 due to the licensing requirement, which the U.S. government told it on Monday would be indefinite. The charges are associated with inventory, purchase commitments, and related reserves for H20 products, the company said. Chinese tech giants including Tencent ( opens new tab, Alibaba ( opens new tab and ByteDance, the owner of TikTok, had increased orders for H20 chips amid surging demand for affordable AI models from companies like startup DeepSeek, Reuters reported in February. Alibaba, ByteDance and Tencent did not immediately respond to requests for comment. The H20 is the primary chip Nvidia is legally permitted to sell in China and was launched after the latest round of U.S. export restrictions took effect in October 2023. Washington has banned exports of Nvidia's most advanced chips to China since 2022, concerned that advanced technologies could be used by China to build up its military capabilities. The restrictions on H20 could benefit Chinese AI chipmakers, particularly Huawei, which offers competing products to Nvidia's lineup, analysts said. "By restricting the H20 system, U.S. regulators are effectively pushing Nvidia's Chinese customers toward Huawei's AI chips," said Nori Chiou, investment director at Singapore-based White Oak Capital Partners. "Huawei's chip design and software capabilities are likely to advance quickly as it gains more customers and development experience," Chiou added.
Zawya
25-02-2025
- Business
- Zawya
Nvidia's H20 chip orders jump as Chinese firms adopt DeepSeek's AI models, sources say
SINGAPORE/BEIJING: Chinese companies are ramping up orders for Nvidia's H20 artificial intelligence chip due to booming demand for DeepSeek's low-cost AI models, six people familiar with the matter said. The surge in orders, which is being reported for the first time by Reuters, underlines Nvidia's dominance of the market and could help alleviate concerns that DeepSeek might cause a slide in AI chip demand. Tencent, Alibaba and ByteDance have "significantly increased" orders of the H20 - a chip specific to China due to U.S. export controls - since the Chinese AI startup burst into the global public consciousness last month, two of the people said. In addition to their internal needs for advanced AI chips, the three tech giants provide cloud computing services through which other firms can access and use AI tools. Smaller companies in sectors like healthcare and education are also purchasing AI servers equipped with DeepSeek models and Nvidia H20 chips, said a source at one of China's largest server makers. Previously only deep-pocketed financial and telecoms firms bought servers with AI computing systems, the source added. U.S. President Donald Trump's administration is looking at imposing restrictions on the sale of the H20 chip to China, Reuters has reported. While the threat of further controls could be a factor in the jump in orders, the sources cited DeepSeek as the reason. The sources did not provide details on the size of the orders. They were not authorised to speak to media and declined to be identified. Nvidia did not respond to queries on how much demand for the H20 it was seeing from China but said its products won "on merit in a competitive field". The company is set to report quarterly earnings on Wednesday. Tencent, ByteDance and Alibaba did not respond to requests for comment. DeepSeek's large language models rival Western systems in performance at a fraction of the cost as they focus on "inference" or producing conclusions. That optimises computational efficiency rather than relying solely on raw processing power. "When DeepSeek launched, many misjudged that computing power demand might stagnate or decrease. In reality, more advanced AI models drive deeper integration into daily life, exponentially increasing inference-level compute need," said Nori Chiou, investment director at Singapore-based White Oak Capital Partners. A DeepSeek-induced global rout in AI stocks that began January 24 saw Nvidia shares lose as much as a fifth of their value at one point but they have since regained most of that ground and are down just 3% for the year to date. Though wider deployment of DeepSeek AI models is expected to help Chinese chipmakers such as Huawei better compete in the domestic market thanks to the models' focus on inference, Nvidia's H20 chip remains the industry standard in China. Analysts estimate Nvidia shipped approximately 1 million H20 units in 2024, generating over $12 billion in revenue for the company. The H20 is the primary chip Nvidia is legally permitted to sell in China and was launched after the latest round of U.S. export restrictions took effect in October 2023. Washington has banned exports of Nvidia's most advanced chips to China since 2022, concerned that advanced technologies could be used by China to build up its military capabilities. Numerous Chinese companies have announced plans to use DeepSeek's models. Among them are Tencent, which has said it will beta test integrating the models into its highly popular WeChat messaging app, and automaker Great Wall which has integrated DeepSeek's model into its connected vehicle system. (Reporting by Fanny Potkin in Singapore, Che Pan in Beijing and Brenda Goh in Shanghai; Editing by Edwina Gibbs)
Reuters
25-02-2025
- Business
- Reuters
Exclusive: Nvidia's H20 chip orders jump as Chinese firms adopt DeepSeek's AI models, sources say
SINGAPORE/BEIJING, Feb 25 (Reuters) - Chinese companies are ramping up orders for Nvidia's (NVDA.O), opens new tab H20 artificial intelligence chip due to booming demand for DeepSeek's low-cost AI models, six people familiar with the matter said. The surge in orders, which is being reported for the first time by Reuters, underlines Nvidia's dominance of the market and could help alleviate concerns that DeepSeek might cause a slide in AI chip demand. Tencent ( opens new tab, Alibaba ( opens new tab and ByteDance have "significantly increased" orders of the H20 - a chip specific to China due to U.S. export controls - since the Chinese AI startup burst into the global public consciousness last month, two of the people said. In addition to their internal needs for advanced AI chips, the three tech giants provide cloud computing services through which other firms can access and use AI tools. Smaller companies in sectors like healthcare and education are also purchasing AI servers equipped with DeepSeek models and Nvidia H20 chips, said a source at one of China's largest server makers. Previously only deep-pocketed financial and telecoms firms bought servers with AI computing systems, the source added. U.S. President Donald Trump's administration is looking at imposing restrictions on the sale of the H20 chip to China, Reuters has reported. While the threat of further controls could be a factor in the jump in orders, the sources cited DeepSeek as the reason. The sources did not provide details on the size of the orders. They were not authorised to speak to media and declined to be identified. Nvidia did not respond to queries on how much demand for the H20 it was seeing from China but said its products won "on merit in a competitive field". The company is set to report quarterly earnings on Wednesday. Tencent, ByteDance and Alibaba did not respond to requests for comment. DeepSeek's large language models rival Western systems in performance at a fraction of the cost as they focus on "inference" or producing conclusions. That optimises computational efficiency rather than relying solely on raw processing power. "When DeepSeek launched, many misjudged that computing power demand might stagnate or decrease. In reality, more advanced AI models drive deeper integration into daily life, exponentially increasing inference-level compute need," said Nori Chiou, investment director at Singapore-based White Oak Capital Partners. A DeepSeek-induced global rout in AI stocks that began January 24 saw Nvidia shares lose as much as a fifth of their value at one point but they have since regained most of that ground and are down just 3% for the year to date. Though wider deployment of DeepSeek AI models is expected to help Chinese chipmakers such as Huawei( better compete in the domestic market thanks to the models' focus on inference, Nvidia's H20 chip remains the industry standard in China. Analysts estimate Nvidia shipped approximately 1 million H20 units in 2024, generating over $12 billion in revenue for the company. The H20 is the primary chip Nvidia is legally permitted to sell in China and was launched after the latest round of U.S. export restrictions took effect in October 2023. Washington has banned exports of Nvidia's most advanced chips to China since 2022, concerned that advanced technologies could be used by China to build up its military capabilities. Numerous Chinese companies have announced plans to use DeepSeek's models. Among them are Tencent, which has said it will beta test integrating the models into its highly popular WeChat messaging app, and automaker Great Wall ( opens new tab which has integrated DeepSeek's model into its connected vehicle system.
