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The GPU shortage is over. The GPU surplus has arrived!

Nvidia couldn't make enough GPUs last year, but now it has the opposite problem.

Enlarge / Nvidia couldn’t make enough GPUs last year, but now it has the opposite problem. (credit: Sam Machkovech)

How quickly things change: A year ago, it was nearly impossible to buy a GeForce GPU for its intended retail price. Now, the company has the opposite problem. Nvidia CEO Jensen Huang said during the company’s Q2 2023 earnings call yesterday that the company is dealing with “excess inventory” of RTX 3000-series GPUs ahead of its next-gen RTX 4000 series release later this year.

To deal with this, according to Huang, Nvidia will reduce the number of GPUs it sells to manufacturers of graphics cards and laptops so that those manufacturers can clear out their existing inventory. Huang also says Nvidia has “instituted programs to price position our current products to prepare for next-generation products.” When translated from C-suite to English, this means the company will be cutting the prices of current-generation GPUs to make more room for next-generation ones. Those price cuts should theoretically be passed along to consumers somehow, though that will be up to Nvidia’s partners.

Nvidia announced earlier this month that it would be missing its quarterly projections by $1.4 billion, mainly due to decreased demand for its gaming GPUs. Huang said that “sell-through” of GPUs, or the number of cards being sold to users, had still “increased 70 percent since pre-COVID,” though the company still expects year-over-year revenue from GPUs to decline next quarter.

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