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Nvidia plans to triple production of its $40,000 chips as it races to meet huge demand from AI companies, report says

Aug 23, 2023 - businessinsider.com
Nvidia is planning to triple the production of its H100 processor, a key component in AI development, in response to the growing demand driven by the AI boom. The company aims to ship between 1.5 million and 2 million units next year, a significant increase from this year's target of 500,000 units. The H100 processor, which costs $40,000, is used in building large AI models for applications like ChatGPT.

The high demand for Nvidia's processors has led to a global scramble among companies and nations to secure a strong supply. The company's processors have become so popular that they are even being purchased through underground markets in Hong Kong by Chinese firms, due to US export rules. Nvidia is set to report its second-quarter earnings soon, with the AI industry and investors keen to hear CEO Jensen Huang's outlook for the company's products.

Key takeaways:

  • Nvidia is planning to triple the production of its H100 processor, a key component in AI development, in response to soaring demand.
  • The company aims to ship between 1.5 million and 2 million units next year, up from a target of 500,000 this year.
  • Nvidia's processors are so sought after that they are being purchased through underground markets in Hong Kong by Chinese firms, due to US export rules.
  • Nvidia's first quarter saw a 19% increase in revenue to $7.2 billion, with the company stating it was 'significantly increasing supply to meet surging demand'.
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