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Nvidia’s Market Capitalization Hits Record High Amidst China Showdown

TL;DR

  • Nvidia’s market value skyrocketed in January, driven by AI optimism and competition with Huawei in China. 
  • Microsoft gained big with Azure, while Tesla faced a value drop due to growth concerns.
  • Nvidia’s H20 challenges Huawei in China, but the chip’s full potential remains uncertain amidst US regulations.

Nvidia Corporation has experienced a staggering surge in its market capitalization, reaching unprecedented heights in January. This remarkable climb, the largest monthly increase in the company’s history, was fueled by a blend of factors, including a surging optimism around artificial intelligence (AI).

In January, its market value surged to new heights, adding a whopping $296.52 billion to achieve a total market value of approximately $1.52 trillion. This achievement surpassed the company’s previous record surge of $248.23 billion in May 2023. The primary drivers of this phenomenal rise were Nvidia’s latest desktop graphics processors, AI-related offerings, and a notable increase in optimism.

Notably, Microsoft, the reigning leader in market capitalization globally, also experienced substantial gains, with an increase of $159.36 billion. This boost was primarily attributed to the soaring demand for its Azure cloud computing services. Conversely, Tesla Inc., one of the top 20 global companies by market cap, suffered a significant setback, losing approximately 24.5% of its value due to concerns regarding slowing growth.

Nvidia takes on Huawei in China

In an intriguing development, reports suggest that its newly tailored chips for the Chinese market are poised to go head-to-head with processors developed by China’s tech giant, Huawei Technologies. 

Insiders reveal that Nvidia’s HA20, another formidable graphics processing unit (GPU), is targeted at AI training customers in China. Pre-orders for this product have already begun, with prices ranging from $12,000 to $15,000 per card. The computing capabilities of Huawei’s Ascend 910B AI chip, a direct rival to Nvidia’s HA20, are on par with comparable pricing.

Nvidia’s newly tailored chips for the Chinese market are set to compete directly with processors developed by domestic giant Huawei Technologies. According to industry sources, these two products, with similar pricing and performance, are poised to challenge each other. 

Nvidia has already initiated pre-orders for its H20, a potent GPU designed for AI training in China, with prices ranging from $12,000 to $15,000 per card. Interestingly, the computing capabilities of the H20 closely mirror those of Huawei’s Ascend 910B, and the prices are expected to be in the same range.

Navigating trade sanctions

It’s essential to note that US trade sanctions have prevented them from exporting advanced GPUs like the A100 and H100 to China. These GPUs are highly sought-after components for AI training. Even Nvidia’s tailor-made A800 and H800 GPUs, designed for Chinese clients, were blocked by updated US controls in October, leading to the introduction of alternatives like the H20.

The authorized distributors have begun discussions with Chinese clients regarding shipments of the H20. Some clients are expected to commence testing the chip shortly. One source, who has placed orders for H20 with Nvidia, anticipates the first volume shipment will reach China in the second quarter. 

Another source from a major Chinese internet gear and server maker expects shipments of their products containing the H20 to begin in July. A few Chinese clients have also received H20 samples for testing purposes.

Global demand for Nvidia graphics cards

Their graphics cards remain in high demand globally, with tech firms and cloud service providers investing billions to secure these GPUs, crucial in powering generative AI technologies such as OpenAI’s ChatGPT. In a significant shift, Nvidia’s data center segment has surpassed video gaming, becoming the top revenue contributor in its 2023 financial year. In the third quarter, ending October 31, Nvidia’s data center revenue skyrocketed by an astounding 279% year-on-year, reaching a record US$14.51 billion.

While Nvidia’s H20 has made its mark, its reception among Chinese clients remains uncertain, as the chip’s capabilities have been limited to comply with new US regulations. Two sources suggest that the H20 needs to catch up to its predecessors, the A800 and A100, regarding capabilities. However, a source from the server maker points out that the situation is still unclear, as full in-house testing is yet to be completed.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Joseph Katala

Joseph is a seasoned professional in the crypto and blockchain industry, boasting over three years of experience. His expertise spans a wide range of roles, from crypto writing and analysis to blockchain development. With a deep passion for the transformative potential of these technologies, he is committed to fostering understanding within the crypto and blockchain spheres through media.

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