Nvidia forecast to bounce back in China to make $12B selling GPUs

Company's sales in the region have dropped under US plan to curb country's AI hopes

Nvidia is forecast to make $12 billion from selling GPUs into China this year despite US trade restrictions aimed at curbing Beijing's AI ambitions.

The California-based biz has been the focus of Washington's crackdowns on AI accelerator silicon sold to the Middle Kingdom amid fears that its technology might be used to develop cutting-edge AI capabilities for Beijing's military.

According to the latest data from research firm SemiAnalysis, Nvidia is set to ship over 1 million of its new H20 product to the Chinese market, and with each one said to cost between $12,000 and $13,000 apiece, that would deliver over $12 billion to the company's coffers.

We asked Nvidia if this matched up with its own sales estimates, but the company declined to comment.

This figure is said by SemiAnalysis to be nearly double what Huawei is likely to sell of its rival accelerator, the Ascend 910B, as reported by The Financial Times. If accurate, this would seem to contradict earlier reports that Nvidia had moved to cut the price of its products for the China market. This was because buyers were said to be opting instead for domestically made kit for accelerating AI workloads.

The H20 GPU is understood to be the top performing model out of three Nvidia GPUs specially designed for the Chinese market to comply with rules introduced by the Biden administration last year that curb performance.

In contrast, Huawei's Ascend 910B is claimed to have performance on a par with that of Nvidia's A100 GPU. It is believed to be an in-house design manufactured by Chinese chipmaker SMIC using a 7nm process technology, unlike the older Ascend 910 product.

If this forecast proves accurate, it will be a relief for Nvidia, which earlier disclosed that its sales in China delivered a "mid-single digit percentage" of revenue for its Q4 of FY2024, and was forecast to do the same in Q1 of FY 2025. In contrast, the Chinese market had made up between 20 and 25 percent of the company's revenue in recent years, until the export restrictions landed.

Not that the GPU giant is doing badly; revenue for the company's fiscal Q1 2025 (ended April 28, 2024) came in at $26 billion, up by an impressive 262 percent from the same period a year ago.

But Washington's attempts to stymie China's AI ambitions may come to nothing. The CEO of Huawei Cloud this week dismissed the notion that a shortage of advanced AI accelerators would hold back the country's AI progress, saying innovation would address the issue.

Zhang Ping'an told attendees at the World AI Conference in Shanghai that innovative approaches that place more focus on the cloud would compensate for the company's lack of advanced GPUs.

Similar sentiments were expressed at another conference organized by the South China Morning Post. The chief financial officer of Kingsoft Cloud claimed that while Chinese companies lacked the budget and access to advanced AI chips enjoyed by American rivals, speedy infrastructure development has delivered a more robust foundation for AI training and inference than is on offer in the US. ®

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