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- NVIDIA has developed the most advanced and optimized AI chips that helped it acquire an 80% market share.
- Companies like Dell, Microsoft, Google, Tesla, xAI, Oracle, and Google are some of the greatest NVIDIA collaborators.
- Soon, we will see more companies entering the AI industry, which can prove challenging for NVIDIA’s growth.
I was stunned after the recent conference of NVIDIA’s CEO, Jensen Huang, amidst the release of a new AI chip, Blackwell. At that conference, the mention of gaming’s future was almost absent, as if they had completely shifted their preferences. As a gamer, I was a bit shocked, but their wise choice of shifting focus to AI development has helped them secure an 80% market share.
Shift Of Preferences
While some fear the evolution of AI, NVIDIA embraced it and shifted its preferences to thrive in this era. NVIDIA already had a strong market presence because of its signature GPUs, which feature tensor and CUDA cores. These added cores leverage excellent deep learning capabilities that are fundamental for AI. As a result of these added capabilities, NVIDIA became familiar to data analysts, engineers, and scientists.
The AI industry is expected to grow by 42% in the next decade. Realizing the potential in this field, NVIDIA continued its advancement in AI and developed some crucial chips necessary for training an AI model. This is what NVIDIA’s CEO had to say at the release of Blackwell:
Generative AI is the defining technology of our time. Blackwell is the engine to power this new industrial revolution. Working with the most dynamic companies in the world, we will realize the promise of AI for every industry.
NVIDIA & Supercomputers
Companies like Meta rely on supercomputers to train complex AI models. NVIDIA produces the chips for these supercomputers, which can handle and process large amounts of data. Automation technology giants like Tesla have already built a supercomputer powered by NVIDIA A100 GPUs. Therefore, NVIDIA is a key player in the supercomputer market with some promising customers.
AI Chips
As I said at the start, NVIDIA recently released another AI chip, Blackwell, which shocked the world with its capabilities. Amidst the rapidly growing demand for AI products, such chips are in huge demand, and NVIDIA is a key supplier. To give you an idea of their demand, OpenAI trained ChatGPT on NVIDIA’s GPUs. As the dataset keeps increasing, this demand will only rise.
Metaverse And Omniverse
Virtual world and augmented reality platforms like Metaverse rely greatly on NVIDIA’s Omniverse platform. Through Omniverse, NVIDIA helps its customers quickly process 3D models and textures. Therefore, NVIDIA’s demand will only increase with the increasing trend of extended reality (XR) and virtual world landscapes.
NVIDIA Made Some Friends
Looking at the usefulness of NVIDIA’s AI equipment, many tech giants showed interest in being NVIDIA’s customers. I think NVIDIA’s early lead in AI played a great role in securing these multimillion-dollar deals. They might not have had this market presence if they had any big competitors. Let us have a look at some of the parties that showed interest in NVIDIA:
Dell Does A Deal
NVIDIA and Dell recently partnered in Project Helix. Through this project, they aim to make generative AI more accessible to businesses. Dell PowerEdge servers optimized for generative AI training and interfacing are a product of this project. This is what NVIDIA’s CEO has to say about this partnership:
With Dell Technologies, we’ve designed extremely scalable, highly efficient infrastructure that enables enterprises to transform their business by securely using their own data to build and operate generative AI applications.
Microsoft Collaborates
Following the trend, Microsoft also went to NVIDIA to benefit from their AI chips. They plan to utilize NVIDIA chips for Microsoft Azure, Copilot, and other cloud services. Adding a statement from Microsoft’s CEO:
Together with NVIDIA, we are making the promise of AI real, helping drive new benefits and productivity gains for people and organizations everywhere.”
Promising Future
Dell and Microsoft are the two biggest collaborators of NVIDIA, but they are not the only ones. Other companies like Tesla, Oracle, OpenAI, Google, and Meta showed interest in establishing business relations with NVIDIA after the release of Blackwell. Impressed by NVIDIA’s progress, this is what Elon Musk, CEO of Tesla and xAI, has to say:
There is currently nothing better than NVIDIA hardware for AI.
NVIDIA’s Boom May Not Last
Looking at NVIDIA’s current growth, I often wonder how long this will last. There is no ultimate answer, but I think this boom might not last very long. The greatest threat to NVIDIA is that its customers are also its competitors. Google, Microsoft, and xAI are already making their own AI hardware.
Once they perfect their AI hardware, their reliance on NVIDIA will end. Also, many big companies do not want to rely on a single manufacturer for their equipment. That’s why, sooner or later, they will opt for AMD or Intel AI hardware that might hinder NVIDIA’s growth.
Bottom Line
NVIDIA owns a major market share because of its advanced and optimized AI technology. Such technology led giants like Dell, Microsoft, Tesla, OpenAI, and Google to NVIDIA’s doorstep. I think NVIDIA has made such a stronghold in the market because it left its competitors behind in developing market-ready AI chips. However, I guess it is difficult for NVIDIA to maintain this growth rate as other companies are also entering the AI industry.
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Moiz Banoori, with a decade of experience in gaming and tech journalism and a degree in journalism, is a notable figure in the industry. He has contributed to various esteemed platforms, showcasing his expertise in both reporting and opinion writing.
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