Nvidia CEO: High Prices for GPUs Are Here to Stay

Why are Nvidia’s first RTX 4000 graphics cards so expensive? Blame the death of Moore’s Law and rising component costs, says CEO Jensen Huang. 

“The idea that a chip is going to go down in cost over time, unfortunately, is a story of the past,” Huang said during a Wednesday Q&A with journalists. 

He was addressing consumer complaints about the pricing for Nvidia’s next-generation GPUs. The most affordable model, the GeForce RTX 4080 12GB model, starts at $899. Then the cards scale up to the $1,199 RTX 4080 16GB model and $1,599 RTX 4090, which arrives next month. 

(Credit: Nvidia)

The high price tags are causing many PC gamers to question(Opens in a new window) who these products are even for. However, Huang says consumers have to readjust their expectations around GPU pricing, pointing to the hefty manufacturing costs involved in chip-making.

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

In addition, Jensen claims that Moore’s Law — the observation that the number of transistors in computer chips double every two years — no longer holds true, at least when it comes to manufacturing costs.

(Credit: Nvidia)

“Moore’s Law is dead. And the ability for Moore’s Law to deliver twice the performance at the same cost, or at the same performance half the cost every year-and-a-half, is over. It’s completely over,” he said. 

Huang then had a message for PC gamers about the GPU pricing: They should avoid comparing Nvidia’s graphics cards by the model number. Instead, it’s better to compare the products by looking at their retail value when they first went on sale. 

“At the same price point, the performance of Nvidia’s $899 GPU or $1,599 GPU, a year ago, two years ago, at the same price point with Ada Lovelace (the GPU architecture in the RTX 4000 series) is monumentally better, off-the-charts better. So that’s really the basis to look at —at the same price point,” Huang said. 

In other words, the RTX 4080 16GB shouldn’t be compared to an RTX 3080, which launched starting at $699. Rather, it’s best compared to an $1,199 RTX 3080 Ti, which arrived last year.

“The numbering system is just a numbering system,” he added. “I think if you go back, a 3080 compared to 1080, compared to 980, compared to 680, compared to 280, if you go back all the way to the 280, a 280 obviously was a lot lower price in the past.” (For perspective, an Nvidia 280 card cost $649 when it first launched in 2008 before being quickly discounted(Opens in a new window) to $499.)

Despite the high pricing for the RTX 4000 series, Jensen said the company plans on releasing lower-end models down the line. “But at the same price point, our value delivered generational is off the charts, and remains off the charts this time,” he added.

According to Nvidia, the first RTX 4000 cards promise to offer a two- to four-times performance improvement from the last generation. That said, it seems a lot of the performance gains will tap AI-based software acceleration techniques to improve frame rates and ray-tracing effects, which won’t apply to all PC games. Stay tuned for our reviews.