Nvidia Cuts China Prices In Huawei Chip Fight

Nvidia's most advanced AI chip developed for the China market has got off to a weak start, with abundant supply forcing it to be priced below a rival chip from Chinese tech giant Huawei, according to sources familiar with the matter, Fanny Potkin and Eduardo Baptista reported for Reuters.

The flattening prices underscore the challenges Nvidia's China business faces amid US sanctions on AI chip exports and heightened competition. I Photo: NVIDIA Corporation

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% to its revenue for fiscal 2024.

The growing competitive pressure in China also adds a cautionary note to investors in the US semiconductor designer as its shares extended a stunning rally following Wednesday's bumper revenue forecast.

Nvidia, which dominates the market for artificial intelligence (AI) chips, introduced three chips tailored for China late last year after US sanctions prevented it from exporting its most advanced semiconductors.

Among those chips, the H20 is the most closely watched as it's the most powerful Nvidia product sold in China, but three supply chain sources told Reuters there is an abundant supply of the chip in the market, signaling weak demand.