900 billion market value evaporated! The Chinese market is shrinking, Nvidia provides exclusive chips, who will pay?
The U.S. chip giant released its latest business data and revenue was better than expected, but Nvidia's share price fell 7% this week, causing the company's market value to evaporate by 125 billion yuan, or more than 900 billion yuan at the current exchange rate.
What the hell is going on?
Some say that the reason may be that Nvidia is slowly losing market share in China.
Nvidia executives acknowledged that the company's revenue in China has fallen significantly since Biden's restraining order went into effect in October.
In previous quarters, Nvidia generated more than 20 percent of its revenue from data centers in restrictive countries such as China, but that has now dropped to less than 10 percent. Nvidia officials said that the current proportion is only in single digits.
In response to this situation, Nvidia began shipping alternative products to the China region. However, at the earnings conference, Nvidia executives did not disclose the reaction of Chinese companies.
However, as recently reported by the United States, many Chinese companies are not keen on these alternative chips.
According to the analysis of industry experts in the United States, Nvidia is currently launching a proprietary version of the chip, mainly to reduce some computing power and functions. Although it is said to be not much different from the original, just to bypass the regulations, Chinese companies do not like it.
Chinese internet giants, including Alibaba and Tencent, are now said to be turning to domestic brands to get more orders for chips.
However, there have been recent rumors that Lenovo is preparing to work more closely with Nvidia to provide AI expertise to the market.
Lenovo recently reported fiscal third-quarter results, with revenue up 3%. Anticipating the current wave of AI, Lenovo may be planning to work more closely together to provide customers with better hybrid AI solutions.
Therefore, it is believed that Lenovo took over after Internet companies such as Ali abandoned the use of Nvidia's castrated chips.
However, the above figures are just rumors and have not yet been officially confirmed by Lenovo.
While China may still need chips from U.S. companies in the short term, China's own alternatives are gradually becoming the preferred choice for Chinese companies.
For Nvidia, the competition is not only coming from China, but American companies also want to minimize their dependence on Nvidia.
An industry insider recently revealed Microsoft's latest move, which is currently working on a new network card with the ultimate goal of reducing reliance on Nvidia products.
However, Microsoft also said that the development process could take more than a year. But what is clear is that Nvidia's dominance in the field of AI chips may gradually weaken.
ps: Since you are here, please like this article, thank you!