Nvidia stock (NASDAQ: NVDA) could face a litmus test this year as the company’s new RTX6000D chip, carefully tailored to the Chinese market, is seeing very little demand. The latest artificial intelligence (AI) chip has experienced lukewarm demand with many tech companies opting not to place orders, reported Reuters, quoting two people familiar with the matter.
The people who spoke on the condition of anonymity revealed that the Nvidia RTX6000D chip’s performance lagged during sample testing. The chip was banned in the US for tailoring it to China, but it is available in the grey market at less than half the price. Even after the steep discount, tech firms are not keen to place orders due to the chip’s low performance. The development could dent Nvidia’s stock prospects for the rest of the year.
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Nvidia’s RTX6000D Chip Loses Demand
Nvidia’s RTX6000D chip, which is specifically designed for AI inference tasks, is seen as expensive for what it does. The price in the grey market is as low as 50,000 yuan ($7,000), but it received no enthusiasm from tech firms. Apart from tech firms, the sources said that even Chinese giants Alibaba, Tencent, and ByteDance are sitting on the sidelines.
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The only icing on the cake is that Nvidia gained permission from the US to sell B30A chip in China. The B30A chip is much more powerful than the H20 chip, which the tech giant is hopeful could sell well in the country. The shipments had to be rolled out in July, but were called off due to regulatory clarity. The RTX6000D chip feels like a downgrade from the other powerful chips, said the source.
An Nvidia spokesperson said in a statement regarding the chip issue that the “market is competitive. We offer the best products we can.” To make things worse, the Chinese government is also not friendly to Nvidia, claiming that it violated the anti-monopoly law.