NVIDIA Dominates in AI Offerings as Competitors Struggle To Keep Up
NVIDIA has stated that its sales will likely rise by 170% this quarter, reaching a valuation of $16 billion.
- In its earnings report, NVIDIA stated that the company is expected to witness a rise of 170% through this quarter, owing to its dominance in AI chips.
- Key competitors such as Intel and AMD struggle to keep up with the demand for AI chips, with notable drops in stock value, leaving NVIDIA with little serious competition in the near future.
With the immense interest in recent years in the development of artificial intelligence (AI) technologies, NVIDIA has emerged as the frontrunner in processor sales. According to the company’s second-quarter earnings announcement, demand for AI chips is expected to result in a 170% jump in stock value, raising NVIDIA’s valuation to $16 billion. NVIDIA has already seen a 220% rise since the start of 2023 with offerings like the H100 Tensor Core GPU and A100 Tensor Core GPU.
NVIDIA is also benefiting from the trend of data centers transitioning from CPUs to AI-accelerating GPUs and the launch of popular services like ChatGPT. A few leading buyers of NVIDIA’s next-gen chips are Microsoft, Alphabet, Meta, and Amazon. Furthermore, NVIDIA announced a $25 billion share buyback program, potentially indicating the company’s belief that the shares are undervalued.
On the other hand, key competitors of NVIDIA, such as Intel and AMD, have seen their stock values drop by 4% and 7% following the quarter’s earnings announcement. Intel, in particular, has seen a slump in demand for its central processors. Its own GPU offering is only expected to come out in 2025.
AMD, on the other hand, has launched a new flagship AI chip called the MI300. However, this chip will only be available in major markets in 2024. It is critical for Intel and AMD to step up on AI tech before major buyers fulfill their requirements through NVIDIA offerings.
See More: X Challenges LinkedIn With New Job Listing Feature
Competitor Chip Makers Take Action to Bridge the Gap
While NVIDIA is far in the lead, this state will not likely last for a long time. In addition to AMD’s offering coming out in 2024, Intel is expected to bring out its Gaudi and Falcon Shores line of AI chips.
Another key development is a prototype chip developed by IBM, which is stated to provide AI computational capabilities at significantly lower power consumption requirements. According to IBM, the chip is 14 times more power-efficient than any leading GPU today. Also, the 14 nm chip is said to have an analog design and is said to encode 35 million phase change memory devices for each component and model up to 17 million parameters.
It will apparently mimic the human brain and perform computations within the memory. Considering that power and infrastructure costs for running AI operations are very high, the IBM chip could be very popular when it comes to the market. Whether NVIDIA can keep up the lead long-term remains to be seen.
What do you think of the role of chip makers in the AI market? Let us know your thoughts on LinkedIn, X (Twitter), or Facebook. We’d love to hear from you!
Image source: Shutterstock
LATEST NEWS STORIES
