Investing.com – Nvidia has been forced to sell artificial intelligence chips at deep discounts in China due to stiff competition from local players such as Huawei, Reuters reported on Friday.
NVIDIA Corp. (NASDAQ:) launched three AI chips specifically targeted at China last year amid U.S. sanctions that prevented the firm from selling its most advanced AI chips in the country.
Among the three models, the H20, which is the most powerful, has seen low demand in China and in some cases was sold at a discount of more than 10% compared to Huawei’s similar offering, the Ascend 910B, a Reuters report said.
The Ascend 910B also received significantly more orders than the H20 from state-owned enterprises, Reuters reported, citing limited government data. This comes after Beijing ordered state-owned enterprises to use Chinese-made silicon.
The 910B is China’s most advanced artificial intelligence chip, which has surged in popularity in the country following US sanctions that attempted to block China’s access to the latest advances in artificial intelligence.
Its popularity in China creates even more obstacles for Nvidia’s business in the country. The chipmaker is struggling to maintain its position in Chinese markets following US sanctions.
In its first-quarter earnings report this week, the company warned that China was becoming an increasingly competitive market and that the company’s data center revenue in China had fallen “significantly.”
High discounts for H20 are also putting further pressure on Nvidia’s profitability.