By Wallace Witkowski
Nvidia Corp. Chief Executive Jensen Huang on Wednesday said he thinks it’s going to be “a pretty terrific Q4 for Ada,” the company’s next-generation chip architecture unveiled this week, even as critics balk of a price hike during a softening in consumer demand.
Nvidia /zigman2/quotes/200467500/composite NVDA +0.83% expects high demand for gaming chips using its next-generation “Ada Lovelace” chip architecture, named after 19th-century English mathematician generally considered to be the world’s first computer programmer for her work on Charles Babbage’s theoretical Analytical Engine.
A smattering of sales will hit the current quarter as Nvidia’s $1,599 flagship RTX 4090 goes on sale Oct. 12, with other cards like the $899 mid-tier 4080 to follow, and the “vast majority” of the launch occurring in the January-ending fiscal fourth quarter, Huang said.
Complaints circulated online about the unexpected price hike. For the respective class of chip, the 4090 is priced 7% above the 2020 launch price of the 3090 it’s meant to replace. (As for the 3090, an upgraded version of the original was going for $1,100 at Best Buy in an advertised $900 price drop.) Even more striking, the 4080 is priced 29% above the 2020 launch price of the 3080.
Lovelace succeeds Ampere , which was unveiled in May 2020, about two months into the COVID-19 pandemic, amid strong demand for gaming cards. Ampere-based gaming cards were introduced in September 2020.
Huang has certainly paid for that optimism in form of two quarters of “really harsh medicine” after the chip maker cut its outlook not just once , or twice , but three times and said $400 million in sales are now up in the air because of a U.S. ban on selling data-center products to China, and a $1.22 billion charge to clear Ampere-based inventory ahead of the Lovelace launch.
“We are very, very specifically selling into the market a lot lower than is what’s selling out of the market, a significant amount lower than what’s selling out of the market,” Huang said. “And I’m hoping that by Q4 time frame, sometime in Q4, the channel would have normalized, and it would have made room for a great launch for Ada.”
To critics, Huang said he feels the higher price is justified, especially since the cutting-edge Lovelace architecture is necessary to support Nvidia’s expansion into the so-called metaverse.
“A 12-inch [silicon] wafer is a lot more expensive today than it was yesterday, and it’s not a little bit more expensive, it is a ton more expensive,” Huang said.
“Moore’s Law’s dead,” Huang said, referring to the standard that the number of transistors on a chip doubles every two years. “And the ability for Moore’s Law to deliver twice the performance at the same cost, or at the same performance, half the cost, every year and a half, is over. It’s completely over, and so the idea that a chip is going to go down in cost over time, unfortunately, is a story of the past.”
“Computing is a not a chip problem, it’s a software and chip problem,” Huang said.
Nvidia continues to grow software
That’s why, over the years, Nvidia has developed such an entrenched software ecosystem for its chips, that it has prompted some analysts to start looking at Nvidia as a quickly emerging software company.
This time around, Huang unveiled a big expansion of the company’s so-called metaverse platform with Nvidia Omniverse Cloud, the company’s first Software-as-a-Service and Infrastructure-as-a-Service product, to design, publish, operate and experience metaverse applications.
Another push into SaaS is Nvidia’s NeMo and BioNeMo large-language-model cloud AI services. LLMs are machine-learning algorithms that use massive text-based data sets to recognize, predict and generate human language. While NeMo is the general model service, BioNemo specializes in applying LLMs to biological and chemical research.