News Update: Some of Nvidia’s major clients have been informed that due to the soaring cost of storage chips, the prices of servers equipped with its artificial intelligence (AI) chips are expected to increase by more than 15% in many cases.
According to Bloomberg, insiders revealed that the price hikes will be applicable to systems set to ship early next year, including those featuring the flagship Vera Rubin and Grace Blackwell chips. The extent of the price increase will depend on which generation of Nvidia chips are involved and the memory configuration.
Companies that manufacture servers on behalf of major data center operators such as Microsoft, Google, and Oracle have recently notified customers of impending price hikes. Nvidia has not commented on the matter.
Nvidia’s accelerator processors are crucial components in computers for developing and running AI software. Their performance relies on the capacity of the dynamic random-access memory (DRAM) that accompanies them. The majority of such chips globally are produced by South Korean companies Samsung Electronics and SK Hynix, as well as the American company Micron Technology. Despite continual efforts to ramp up production, these companies have struggled to keep pace with rapidly growing demand, leading to significant price increases for products of this kind.
Nvidia’s chips are at the core of AI infrastructure development, and the company is set to announce its second-quarter performance on August 26. The financial results of this AI chip giant are crucial for the tech industry and investors, who have previously invested heavily in constructing AI infrastructure in hopes of reshaping the economic landscape. Nvidia is seen as a representative of the entire AI ecosystem, which includes not only chip manufacturers but also enterprises that provide financing for rapid expansion of data centers.
Enterprises building AI data centers have an exceptionally high demand for storage chips, causing a shortage of this critical component and continuous price hikes. Several major tech companies, including Apple and Qualcomm, have recently stated that they are forced to raise product prices due to the shortage of storage chips.