The report firstly notes that China's national strategy for developing AI has led to a doubling of domestic AI chip production this year; however, the country cannot keep up with demand from its biggest tech companies. The report cites a shortfall of nearly 1.5 million chips, with only 3.5 million expected to be manufactured domestically while demand "far exceeds" 5 million. To compensate, China is purportedly turning to Nvidia's gaming and workstation processors, which are compliant with U.S. export controls, repurposing them for AI.
This is significant pressure on a GPU market where prices for enthusiast cards have already skyrocketed. The RTX 5090's MSRP is $1,999; however, the card can now only be found at a handful (three) of third-party resellers for no less than $7,199, and has all but disappeared from the market.
The report highlights that demand for Nvidia's GPUs is driven in part by its CUDA software, which remains more favorable than Huawei's Cann alternative.
H200s finally reach China under case-by-case import licenses, but it's already too late for Nvidia
Investigative report details how export-restricted Nvidia AI chips reach China
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/pc-components/gpus/SPONSORED_LINK_URL
- https://www.tomshardware.com/pc-components/gpus/chinese-ai-companies-buy-1-million-nvidia-gpus-in-a-single-year-report-claims-export-control-compliant-chips-flood-the-market-to-bridge-gap-in-compute-demand#main
- https://www.tomshardware.com/membership
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Informational only. No financial advice. Do your own research.