Testing found that the chip’s performance lagged that of the RTX5090, which the U.S. government has banned for use in China.
Nvidia Corp. (NVDA) shares fell modestly in the early premarket session on Tuesday, signaling that the stock could clock back-to-back losses.
A Reuters report, citing two people, stated that the Jensens Huang-led company’s latest artificial intelligence (AI) chip, RTX6000D, built exclusively for the Chinese market, did not find many takers and saw only lukewarm demand from local tech companies.
The RTX6000D designed mainly for AI inference tasks, was perceived to be expensive vis-a-vis its performance. Testing found that the chip’s performance lagged that of the RTX5090, which the U.S. government has banned for use in China. This is despite the RTX5090 being available through grey market channels at a price less than half that of the RTX6000D.
The report stated that the RTX 6000D costs 50,000 yuan ($7,000).
Nvidia stock slipped 0.29% to $177.55 in premarket trading. The Nvidia stock continued to elicit ‘bearish’ sentiment (41/100) from among the retail users of Stocktwits by early Tuesday, and the message volume also stayed at ‘low’ levels.
Nvidia’s China business has suffered due to the U.S. government’s decision last year to curb exports of the company’s high-performance chips to the Asian country, citing a security threat. After the chipmaker developed a China-specific chip — the H20 — that sidesteps the restrictions, the incoming Trump administration chose to ban the compliant chip.
Since then, the White House has relaxed its restriction and has begun to give export licenses to Chinese companies on a case-by-case basis.
On the earnings call, Nvidia CFO Colette Kress said the company’s current guidance did not include any H20 shipments to China. “If geopolitical issues subside, we should ship $2 billion to $5 billion in H20 revenue in Q3,” she said.
Last week, Kress said at Goldman’s Communacopia Technology Conference that several of its key Chinese customers received licenses from the U.S. government, paving the way for the company to ship China-specific H20 AI chips to the country.
On Monday, Nvidia’s stock underperformed the broader market after China’s antitrust regulator announced it had begun a preliminary investigation into the company’s 2019 acquisition of Mellanox.
The stock has gained 32.4% year-to-date (YTD).
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