A Chinese government think tank recommends that data centers continue using Nvidia Corp NVDA chips due to high costs of switching to local alternatives.
The report highlights that changing from Nvidia’s GPUs to local options is complicated and costly because of different hardware and software requirements.
Nvidia claims the U.S. semiconductor embargo hasn’t affected them, and their stock rose on Monday.
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The China Academy of Information and Communications Technology (CAICT) stated that Nvidia’s A100 and H100 chips remain top choices for centers needing high computing power, according to SCMP reports.
After U.S. sanctions, Nvidia created the A800, H800, and H20 chips specifically for the Chinese market, which is crucial for Nvidia. In 2024, 1 million H20 GPUs sold in China may bring in $12 billion.
China’s demand for GPU-based AI computing has grown by 70% yearly, but CAICT’s report mentions many data centers are not fully utilized due to mismatches in supply and demand and non-standard hardware.
KeyBanc analyst John Vinh considers Nvidia a top pick, predicting over $7 billion in fourth-quarter revenues, thanks to strong Hopper demand, hinting at about 15% revenue growth from the previous quarter.
Nvidia CEO Jensen Huang noted high demand for the Blackwell GPU, which is on track for production.
Nvidia’s stock has surged over 200% in the past year. Investors can invest in Nvidia through the SPDR S&P 500 SPY and iShares Core S&P 500 ETF IVV.
Price Action: As of Monday, NVDA stock is up 2.80% at $138.61.
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