Nvidia CEO: High Prices for GPUs Are Here to Stay

Why is Nvidia’s first RTX 4000 graphics card so expensive? CEO Jen-Hsun Huang said that blamed the demise of Moore’s Law and rising component costs.

“Unfortunately, the idea that chip costs will come down over time is a thing of the past,” Huang said in a question-and-answer session with reporters on Wednesday.

He’s addressing consumer complaints about the pricing of Nvidia’s next-generation GPUs. The most affordable model, the GeForce RTX 4080 12GB model, starts at $899. Those cards then expand to the $1,199 RTX 4080 16GB model arriving next month and the $1,599 RTX 4090.

(Source: Nvidia)

High prices lead to many PC gamers question(opens in new window) Who these products are even for. However, Huang said consumers must recalibrate their expectations for GPU pricing, noting the high manufacturing costs involved in chip manufacturing.

“First of all, a 12-inch wafer is a lot more expensive today than it was yesterday. And it’s not a little more expensive, it’s a ton more expensive,” he said.

Additionally, Jensen claims that Moore’s Law (the observation that the number of transistors in a computer chip doubles every two years) no longer applies, at least when it comes to manufacturing costs.

(Source: Nvidia)

“Moore’s Law is dead. Moore’s Law’s ability to deliver twice the performance at the same cost, or the same performance at half the cost per year is over. Completely over,” he said.

Huang then has a message for PC gamers about GPU pricing: They should avoid comparing Nvidia cards by model number. Instead, it’s best to compare products by looking at their retail value when they first hit the market.

“The performance of Nvidia’s $899 GPU or $1,599 GPU a year ago, two years ago, at the same price point, is much better at the same price point as Ada Lovelace (the GPU architecture in the RTX 4000 series). – The charts are better. So that’s really the base to consider — at the same price point,” Huang said.

In other words, the RTX 4080 16GB shouldn’t be on par with the RTX 3080, which starts at $699. Instead, it’s the best compared to the $1,199 RTX 3080 Ti that arrived last year.

“The numbering system is just a numbering system,” he added. “I think if you go back, the 3080 is a lot cheaper than the 1080, the 980, the 680, the 280, and if you keep going back to the 280, the 280 is obviously a lot cheaper than it used to be.” (For perspective, Nvidia 280 cards were first introduced in 2008 $649 and soon Discount(opens in new window) to $499. )

Despite the high pricing of the RTX 4000 series, Jensen said the company plans to release lower-end models. “But at the same price point, our intergenerational value delivery was off the chart, and this time still off the chart,” he added.

According to Nvidia, the first RTX 4000 card promises two to four times the performance boost over the previous generation. That said, it appears that a lot of the performance boost will take advantage of AI-based software acceleration to improve frame rates and ray tracing, which doesn’t apply to all PC games. Please stay tuned for our reviews.