Nvidia Slashes AI Chip Prices As Huawei Launches China Discount War

Nvidia in China mirrors Apple and Tesla, which have been locked in price wars with Chinese companies. The latest battle in the semiconductor space is between Chinese tech giant Huawei, which is challenging Nvidia's technological monopoly on AI chips. This should be enough to understand why Washington elites passionately oppose Huawei. 

A few short days after Nvidia's strong earnings report, a new report by Reuters revealed that the company's China unit had been pressured by "abundant supply forcing it to be priced below a rival chip" produced by Huawei. 

Sliding AI chip prices in Nvidia's China unit compound the challenges faced by US sanctions on AI chip exports. Rising competition from Huawei casts doubts on the company's future in a market that contributes about 17% of its revenue.

This intensifying competition in China serves as a cautionary sign to investors following a strong earnings report on Wednesday.