Nvidia GPUs see skyrocketing prices and extreme demand amid AI trend

Amid the AI revolution, Nvidia GPUs experience an unprecedented surge in prices and an overwhelming demand whereas raising questions of another GPU shortage.

Nvidia GPUs see skyrocketing prices and extreme demand amid AI trend
Is it coming again? (Image: Reuters)

Just as consumers were starting to recover from the long-lasting grip of the graphics card shortage that plagued the market in recent years, a new report is raising concerns about a potential recurrence of supply constraints. The demand for Nvidia GPUs, driven by the burgeoning field of artificial intelligence (AI), has reached unprecedented levels, sending prices soaring and leaving enthusiasts and professionals alike in a state of unease. As the AI trend continues to gain momentum, the question arises: Are consumers safe from another nightmare scenario, or is the industry on the verge of another grueling GPU shortage?

Nvidia GPUs see skyrocketing prices and extreme demand amid AI trend

DigiTimes reports a substantial surge in demand for Nvidia's chips, attributing it to the rapid expansion of artificial intelligence (AI) tools such as ChatGPT. Nvidia's graphics cards, renowned for their exceptional performance in AI tasks, including the A100 and H100 models, are now facing overwhelming demand, putting the company in a challenging position to meet the massive market needs. The surge in demand reflects the significant growth of the AI industry, and Nvidia finds itself grappling with the task of keeping pace with the escalating requirements.

nvidia gpu
Nvidia H100 GPU. (Nvidia)

The strain on Nvidia is particularly evident in China, where the company has resorted to selling modified variants of its A100 and H100 chips as a means to navigate around U.S. sanctions. Due to the scarcity of AI-capable chips in the Chinese market, the modified versions, known as the A800 and H800, are experiencing an exceptional surge in demand, leading to a rapid depletion of stock as customers eagerly snatch them off the shelves. This highlights the significant appetite for AI technologies in China and the challenges faced by Nvidia in meeting the overwhelming market needs.

Nvidia AI-focused GPU price on intense hike in China

As a consequence, Nvidia has implemented price increases of up to 40% above the manufacturer's suggested retail price (MSRP), resulting in the A800 being sold at staggering prices reaching up to $36,500. Even the Nvidia V100, a graphics card that made its debut back in 2018, is now being priced as high as $10,000.

Nvidia A100 GPU. (Nvidia)

These significant price hikes reflect the intense demand and limited availability of AI-capable chips, creating a challenging market landscape where consumers are faced with exorbitant costs to acquire these in-demand products.