Exclusive: Huawei devices will cost the same as Nvidia's latest AI processor set, which is targeted towards China

Exclusive: Huawei devices will cost the same as Nvidia's latest AI processor set, which is targeted towards China

BEIJING/SHANGHAI: According to people with knowledge of the situation, Nvidia has begun accepting pre-orders for a new artificial intelligence (AI) chip designed specifically for China from distributors who are charging a price comparable to that of a competing Huawei product.

Of the three graphics cards that Nvidia sent to China after the US prohibited high-end chip exports, the H20 is the most powerful. It was designed for the AI market in an effort to prevent China from developing AI and advanced computers for its military.

Naturally, the H20 will be less powerful than Nvidia's flagship H100 AI processor and the H800, the latter of which is a card designed specifically for China and was also outlawed in October.

But according to three unidentified individuals who were not allowed to talk to the media, the H20's specs also show that it is less powerful than Huawei's Ascend 910B in a few crucial areas.

Two sources claim that Nvidia has recently priced orders for H20 distributors in China between $12,000 and $15,000 per card.

According to one of the individuals, some distributors have started marketing the chips with a large markup at the lower end of that range, around 110,000 yuan ($15,320). In contrast, Huawei's 910B is being marketed for roughly 120,000 yuan, according to two sources.

Nvidia chose not to respond.

Distributors, according to a source, are selling pre-configured H20 servers with eight AI chips for 1.4 million yuan. In contrast, servers with eight H800 processors went for almost 2 million yuan when they were first introduced a year ago.

According to the source, distributors have informed clients that they may start receiving deliveries of H20 goods in smaller batches in the first quarter of 2024 and in bigger amounts starting in the second quarter.

Prior to the US sanctions, Nvidia had a nearly 90 percent market share in China's AI chip industry. However, it is today facing growing competition from local competitors, Huawei foremost among them.

Concerns that consumers may have more limited access to Nvidia goods due to US sanctions have led to the rise in popularity of Huawei's 910b processor, which is now regarded as the most competitive AI option accessible inside China.

Regarding specs, one area where the H20 seems to fall short of the 910B is in its FP32 performance, which is rated as low and is a crucial statistic that gauges how quickly a chip can handle typical tasks. It is also half the capacity of its competitor.

The source claims that when it comes to connection speed—a metric that quantifies how quickly data can move between chips—the H20 outperforms the 910B.

According to him, this implies that in applications where a large number of chips must be connected in order for a system to function, the H20 and 910B are still competitive.

Nvidia intends to start mass producing the H20 in the second quarter of this year, according to a report from Reuters last month.

Its initial debut date was set for November of last year, but sources at the time said that the delay was brought on by issues server manufacturers were experiencing integrating the chip.

None of the H20, L20, or L2 are presently mentioned on Nvidia's website. Nvidia also intends to deploy two more processors that are particular to China, the L20 and L2. Reuters was unable to ascertain the current status of the rollout for those two chips.

As a sign of how important the Chinese market is to Nvidia, local media said that last month, CEO Jensen Huang traveled to the company's offices in Shenzhen, Shanghai, as well as Beijing for the annual company parties held in advance of the Lunar New Year holidays.