No more crypto: Nvidia drops crypto venture over low profit

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It’s the end of the line for Nvidia’s cryptocurrency mining chips.

The company, which is considered to be one of the biggest producers of graphic cards and chips in the world, announced that it is dropping its crypto venture as it isn’t recording any profit from its crypto-specific products. Nvidia is also affected by the downward trend of cryptocurrency’s price and the profitability of its cryptocurrency-focused mining chips has equally declined as well.

In a statement, Nvidia CFO Colette Kress said, “We believe we’ve reached a normal period as we’re looking forward to essentially no cryptocurrency as we move forward. Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million, and we now expect a negligible contribution going forward.”

Despite the slowdown in its crypto business, Nvidia reported that its main business operations were “terrific” and the firm was still showing strong year-on-year growth. The chip maker considered the recent crypto-mining revenue as an unexpected bonus, but one which the company cannot continue to rely on.

Other crypto mining chip makers like Bitmain, Samsung and Canaan have been seeing improvement in their sales. Bitmain, considered the largest crypto mining chip manufacturer today, generated $1.1 billion profits in the first quarter of 2018, according to reports. Nvidia, in comparison, reported a profit of $550 million during the same period.

Experts chalked up the stark contrast between Bitmain’s success and Nvidia’s crypto dilemma to the decline in demand for GPU mining. Reliance on graphic cards and chips that lack computing power to mine crypto is becoming difficult for miners. Only few tokens and cryptocurrencies can be produced with GPU miners. Also, ASIC mining chips or mining equipment are being improved and developed specifically to mine cryptocurrencies and these are proving to be an attraction for crypto miners.

Nvidia CEO Jensen Huang said the company has now turned its attention to artificial intelligence (AI). Nvidia also has many data centers using modified versions of its graphics chips to run their image and voice recognition software. The company is also focusing on computer gaming and data processing.

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