Nvidia’s H20 AI Chip challenges in the Chinese market:

 

Nvidia's latest AI chip, the H20, designed specifically for the Chinese market, is facing challenges due to weak demand, causing its prices to drop below those of Huawei's Ascend 910B chip. Despite being Nvidia's most advanced product in China, the H20 is struggling to gain traction, amidst stiff competition and US sanctions affecting Nvidia's business in the country. The company is trying to balance its presence in China with managing US tensions and uncertainties for its future in the market. Huawei's aggressive expansion and superior performance of its Ascend 910B chip add to Nvidia's challenges, as Beijing shows a preference for domestically made chips. These factors contribute to Nvidia facing pressure in China, with its profit margins being squeezed as it competes with local players in the market.

• Weak Demand: Nvidia’s H20 AI chip is experiencing weak demand in China, leading to a price drop below Huawei’s Ascend 910B chip¹.
• Stiff Competition: The H20 chip is struggling to gain traction amidst strong competition from local players like Huawei².
• US Sanctions: US sanctions are affecting Nvidia’s business operations in China, adding to the company’s challenges³.
• Market Balancing: Nvidia is attempting to balance its presence in China while managing tensions with the US and uncertainties about its future in the market⁴.
• Huawei’s Expansion: Huawei’s aggressive expansion and the superior performance of its Ascend 910B chip are intensifying the competition for Nvidia³.
• Preference for Domestic Chips: Beijing’s preference for domestically made chips is contributing to the pressure on Nvidia in China⁴.
• Profit Margins Squeezed: Nvidia’s profit margins are being squeezed as it competes with local players in the Chinese market².

These points summarize the current situation Nvidia faces with its H20 AI chip in China.