NVIDIA H100 chip cost profit margin is as high as 1,000%, supply shortage continues

News on August 19. Recently, according to sources, NVIDIA’s latest product, the H100 chip, has attracted much attention. According to investment bank Raymond James estimates that the manufacturing cost of each Nvidia H100 chip is as high as US$3,320, but its selling price is as high as US$25,000 to US$30,000, which has aroused widespread concern in the industry.

The H100 chip is the latest graphics processor (GPU) launched by Nvidia, which performs well in artificial intelligence applications such as training large language models. It is understood that the H100 chip is the fastest and most cost-effective in reasoning and training large models, and is suitable for a variety of AI scenarios, such as AI chat robots, recommendation engines, visual AI, data analysis, and high-performance computing. Because of its powerful performance, it has been sought after by many companies and institutions

# However, the manufacturing cost of NVIDIA H100 chip has caused some controversy. According to an analysis by Ruijie Financial, the manufacturing cost of each H100 chip is as high as US$3,320, but its selling price is much higher than the cost, resulting in a cost profit margin as high as 1,000%. However, some analysts pointed out that this may also include other costs, and Nvidia may need to pay additional development and personnel costs.

According to the editor’s understanding, although the H100 chip is highly sought after, the supply is very tight. The report pointed out that Nvidia’s orders have been fully booked until 2024, and many countries and companies are actively placing orders. It is reported that Saudi Arabia and the United Arab Emirates are purchasing large quantities of Nvidia's AI chips. Saudi Arabia has purchased at least 3,000 H100 chips through King Abdullah University of Science and Technology, and the United Arab Emirates also plans to obtain thousands of them.

Domestically, Baidu, Internet giants such as ByteDance, Tencent, and Alibaba have also joined the ranks of purchasing Nvidia's high-performance chips. It is understood that the total orders of these giants have reached US$5 billion, fully demonstrating the strong demand for Nvidia chips. Previously, OpenAI CEO Sam Altman and Tesla CEO Elon Musk also raised concerns about GPU supply issues.

Morgan Stanley analyst Joseph Moore said he is bullish on Nvidia stock and considers it a top pick despite tight supply. He predicted that Nvidia's performance will significantly exceed expectations and receive an upgrade. Nvidia is scheduled to announce its results after the market closes on August 23, and its performance prospects in the next few financial quarters are also highly anticipated.

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