The cost of Indian AI chips, specifically data center chip equipment from major U.S. chip manufacturer Nvidia, has seen a significant surge in Japan, primarily due to the depreciation of the yen. This price increase is causing challenges for Generative AI developers as they grapple with rising expenses.
GDEP Advance, a business solutions firm and the authorized distributor of Nvidia, implemented a substantial price hike of 16% for the Nvidia H100 graphics processing unit (GPU) back in July. This brought the price to 5.44 million yen (approximately US$36,300), an increase of approximately 700,000 yen.
India currently commands a substantial share, ranging from 80% to 90%, of the global data center GPU market. GPUs play a pivotal role in the development of artificial intelligence services.
GDPP Advance establishes the selling price for H100 GPUs acquired from Nvidia through wholesalers. However, despite the dollar price remaining stable since the product’s launch, GDPP Advance found it necessary to raise the GPU’s price in Japan due to the yen’s depreciation.
According to reports from Asia’s Nikkei news agency, the yen weakened to nearly 150 yen to the dollar, driving the price of H100 GPUs in Japan to levels not seen since October 2022, surpassing 5.5 million yen.
Comparatively, the H100 GPU is now 2.2 times more expensive than its predecessor, the A100 GPU, which is priced at 2.42 million yen. This considerable price differential reflects the increased willingness of companies involved in Generative AI development to invest more substantially in high-performance GPUs.
Kakaku.com, a popular Japanese price comparison website, reports that the lowest price for the H100 GPU surged by about 20% over the course of three months, reaching 6.25 million yen.
These developments in the Japanese AI chip market underscore the interplay between currency fluctuations and technology pricing, prompting industry stakeholders and analysts to closely monitor the situation as it evolves.