Editor's note: The headline and third paragraph of this story have been updated to more accurately reflect Nvidia's sales of AI chips in China to comply with U.S. export controls.
NVIDIA Corporation Amazon.com Inc. (NASDAQ:NVDA) plans to sell $12 billion worth of artificial intelligence chips in China this year, despite U.S. export controls, according to the Financial Times.
Analysts predict the company plans to ship more than 1 million of its new H20 chips, which are designed to comply with U.S. regulations on sales of AI processors to Chinese customers.
That figure is nearly double the projected sales of Huawei's Chinese rival, the Ascend 910B, according to estimates from chip consultancy Semianalysis.
With each H20 chip priced at $12,000 to $13,000, Nvidia could generate more than $12 billion in sales, surpassing the $10.3 billion in revenue it generated across its China operations last year.
Nvidia Chief Financial Officer Colette Kress noted that revenue from its China data center division has fallen sharply since new export restrictions were put in place in October.
Before the U.S. export restrictions, China accounted for more than a quarter of Nvidia's total revenue, and even if the H20 chips sell as well as analysts expect, China could account for about 10% of revenue this year.
Analysts at Morgan Stanley and Semianalysis report that the H20 chips are currently shipping in volume and are popular among Chinese customers, despite offering lower performance than Nvidia's U.S.-sold chips.
Most Chinese AI companies build their AI models on NVIDIA's ecosystem, and switching to Huawei's infrastructure will take time and cost.
Despite those restrictions, Nvidia's total revenue from China, including Hong Kong, grew more than 50% year-over-year in the most recent quarter, reaching $2.5 billion.
Recent reports have said that Nvidia has come under scrutiny following reports that its advanced AI chips are being smuggled into China.
It's estimated that around 12,500 AI chips are smuggled out per year, while Nvidia sold more than 2.6 million A100 and H100 chips worldwide last year.
Nvidia's stock price has risen more than 203% over the past 12 months. Investors can invest in Nvidia in the following ways: SPDR S&P 500 (NYSE:SPY) and iShares Core S&P 500 ETF (NYSE:IVV).
Price Trends: NVDA shares were trading at $127.40 in pre-market trading, down 0.76% as of last check on Friday.
Disclaimer: This content was produced in part with the help of AI tools and was reviewed and published by Benzinga editors.
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This article, “Nvidia Could Make $12 Billion in China With New AI Chips Compliant with U.S. Regulations: Report (Corrected)” originally appeared on Benzinga.com.
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