Exclusive: Nvidia's new RTX6000D chip for China finds little favour with major firms, sources say

Nvidia's new China-specific AI chip, the RTX6000D, is reportedly facing lukewarm demand from major Chinese tech firms, including Alibaba and Tencent, due to its high cost and inferior performance compared to grey-market alternatives, contradicting optimistic sell-side analyst projections. This situation, amidst ongoing uncertainty regarding U.S. approval and shipment of more powerful chips like the H20 and B30A, highlights the significant challenges Nvidia faces in navigating U.S. export controls and escalating U.S.-China trade tensions, further complicated by Beijing's recent anti-monopoly probe against the company.

Analysis

Nvidia's strategy for the Chinese market is facing significant execution and geopolitical risks, evidenced by the lukewarm reception of its new compliant AI chip, the RTX6000D. Major Chinese technology firms are reportedly forgoing orders due to an unfavorable price-performance ratio, with the chip's roughly $7,000 price tag deemed too high for performance that lags behind banned, yet readily available, grey-market alternatives selling for less than half the price. This tepid initial demand creates a stark contrast with optimistic sell-side production forecasts from JPMorgan and Morgan Stanley, which had projected 1.5 million to 2 million units, respectively, for the second half of the year, signaling a potential headwind for near-term revenue. The situation is further compounded by customer hesitation as they await clarity on the more powerful, but delayed, H20 chip and the potential U.S. approval of the even more performant B30A. Simultaneously, Nvidia faces mounting pressure from Beijing, which has initiated an anti-monopoly probe and is actively encouraging firms to adopt domestic chip solutions, thereby threatening Nvidia's long-term position in its second-largest market.

Key Decisions for Investors

• Investors should treat sell-side revenue forecasts for Nvidia's China-specific chips with caution, as early demand signals for the RTX6000D suggest a significant risk of underperformance against analyst expectations.
• Closely monitor geopolitical developments, particularly U.S. decisions on export licenses for the H20 and B30A chips and the progression of China's anti-monopoly investigation, as these will be critical determinants of Nvidia's market access.
• Re-evaluate Nvidia's competitive moat in China, considering the viability of grey market alternatives and the increasing pressure from Beijing for local firms to prioritize domestic AI accelerators.