gpu price wars? nvidia faces pressure as competition heats up
New Delhi, Monday, 17 March 2025.
Nvidia, which had a market capitalization of $3.3 trillion in June 2024, may see its margins shrink. Increased competition and new entrants are set to drive down GPU prices. The India AI mission’s AI Compute Portal is also increasing compute availability with its 18,000 GPUs. NxtGen, a service provider for the AI mission, charges ₹140 per GPU hour, significantly less than the global benchmark. Investors are advised to monitor Nvidia’s strategies and competitive positioning closely.
Competition and pricing pressures
Nvidia currently holds a near-monopoly in the AI GPU space, making price negotiations difficult [1]. NxtGen’s CEO, AS Rajgopal, anticipates that growing competition will lead to price declines [1]. This increased competition and the entry of new players could negatively impact Nvidia’s profit margins and market share [1]. Investors should closely monitor Nvidia’s pricing strategies and competitive positioning in response to these market dynamics [1].
India ai mission impact
The India AI Mission, with its ₹10,000 crore investment, aims to encourage AI adoption by subsidizing up to 40% of costs for academic institutions, research organizations, and SMEs [1]. The AI Compute Portal, launched under this mission, provides access to 18,000 GPUs [1]. NxtGen, a service provider for the AI mission, offers Nvidia’s H100 and H200 GPUs, along with AMD’s MI300X GPUs [1]. This increased availability of GPUs, coupled with subsidized costs, could reduce demand for Nvidia’s high-end GPUs, potentially affecting its revenue [1].
NxtGen’s expansion and strategy
NxtGen is expanding its AI and cloud services, planning to establish 700 edge data centers across India [1]. This expansion requires significant investment, estimated between $2 billion to $3 billion over the next two to three years [1]. NxtGen also plans to procure approximately 12,000 more GPUs [1]. By establishing data centers in various district headquarters, NxtGen aims to decentralize AI compute resources, addressing the unsustainability of urban data centers due to high real estate costs and strained power grids [1].
Citadel’s market influence
Citadel, a financial firm with $65 billion in assets under management as of January 1, 2025, is a major player in the stock market [2]. Ken Griffin founded Citadel in 1990, and the company has since become a diversified financial group [2]. Citadel Securities, one of its core businesses, is a leading market maker, handling a significant portion of U.S. stock market trades [2]. In the first half of 2024, Citadel Securities’ net trading revenue increased by 81% to $4.9 billion [2]. Citadel’s activities reflect the broader trends influencing market dynamics and investor behavior [2].
Potential for gpu overlocking
The RTX 5080’s GDDR7 memory has overclocking potential [4]. An update to MSI Afterburner, a popular overclocking utility, allows users to extend the memory frequency adjustment range, potentially increasing speeds from 30 Gbps to 36 Gbps [4]. Overclocking the RTX 4070 Ti SUPER’s GDDR6X memory to 26 Gbps allowed it to outperform the RTX 4080 in some cases [4]. This suggests that overclocking capabilities could mitigate performance gaps and influence consumer choices, impacting demand for higher-end Nvidia cards [4].