Nvidia Corp (NASDAQ:NVDA) is on track to sell $12 billion worth of artificial intelligence chips in China this year despite U.S. export restrictions, the Financial Times reports.
Analysts say the company will ship more than 1 million new H20 chips, aimed at circumventing US restrictions on the sale of AI processors to Chinese customers.
That amount is almost double what Huawei expects to sell for its China-made rival, the Ascend 910B, the FT said, citing estimates from chip consultancy SemiAnalysis.
Each H20 chip costs between $12,000 and $13,000, meaning Nvidia could generate more than $12 billion in revenue, surpassing the $10.3 billion in revenue generated by its entire China business last fiscal year.
Nvidia CFO Colette Kress noted a significant decline in data center revenue in China following the introduction of new export restrictions in October.
Before the U.S. export controls, China accounted for more than a quarter of Nvidia’s total revenue. Even if the H20 chip meets analysts’ expectations, China could account for about 10% of sales this year.
Analysts at Morgan Stanley and SemiAnalysis report that the H20 chip is now shipping in large numbers and is popular among Chinese customers, despite lower performance than Nvidia’s chips sold in the US.
Most Chinese AI companies have built their AI models on Nvidia’s ecosystem, making the transition to Huawei’s infrastructure time-consuming and costly.
Despite the restrictions, Nvidia’s total revenue from China, including Hong Kong, rose more than 50% year over year to $2.5 billion in the most recent quarter.
Recent reports have suggested that Nvidia is being closely monitored over reports that its advanced AI chips are being smuggled into China.
It is estimated that around 12,500 AI chips are smuggled annually, while Nvidia sold over 2.6 million A100 and H100 chips worldwide last year.
Nvidia stock is up more than 203% over the past 12 months. Investors can gain exposure to Nvidia through SPDR S&P 500 (NYSE:SPY) and iShares Core S&P 500 ETF (NYSE:IVV).
Price promotion: NVDA shares were down 0.76% to $127.40 before market close at last check on Friday.
Disclaimer: This content is produced in part using AI tools and was reviewed and published by Benzinga’s editors.
Photo via Wikimedia Commons
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This article Is Nvidia Defying US Export Controls? What’s Going On? originally appeared on Benzinga.com
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