Technology
Friday, February 9th, 2024 4:36 pm EDT
Key Points
- Nvidia is establishing a new business unit dedicated to designing customized chips for cloud computing firms and other clients, particularly focusing on advanced artificial intelligence processors, in a bid to tap into the burgeoning market for bespoke AI chips and safeguard its dominant position in the industry.
- With Nvidia currently holding about 80% control of the high-end AI chip market, valued at $1.73 trillion, the company aims to address the growing demand for custom AI chips among major customers such as Meta, Microsoft, Alphabet, and OpenAI, who are increasingly developing their own internal chips tailored to specific needs to improve efficiency and reduce costs.
- Nvidia’s strategic move involves collaborating with these companies to develop custom AI chips that suit their unique requirements, aiming to compete with rival firms like Broadcom and Marvell Technology, potentially posing a significant threat to their market dominance. Additionally, Nvidia plans to expand its presence beyond the data center sector to target telecom, automotive, and video game markets, leveraging its technology expertise to cater to diverse industry needs and further expand its market reach.
Nvidia is strategically venturing into designing bespoke chips tailored for cloud computing firms and other entities, including advanced artificial intelligence processors, aiming to capitalize on the burgeoning market for custom AI chips and safeguard its position amidst growing competition. With its dominant control over 80% of the high-end AI chip market, Nvidia seeks to leverage its expertise to aid companies in developing custom AI chips, which have become imperative for enhancing efficiency and reducing costs in specialized applications. The company’s move comes as tech giants such as Meta, Microsoft, and Alphabet race to develop their own internal chips to meet specific requirements. Nvidia’s initiative aims to cater to the evolving needs of its major customers by providing tailored solutions while diversifying its revenue streams. The data center custom chip market is projected to reach $10 billion this year, with significant growth potential in the coming years. Beyond the data center sector, Nvidia is also exploring opportunities in telecom, automotive, and video game markets, with plans to collaborate with companies like Ericsson for wireless chips and potentially providing custom designs for next-generation consoles. This strategic expansion into diverse sectors signals Nvidia’s ambition to broaden its market reach and stay ahead in the rapidly evolving semiconductor industry.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/09/nvidia-chases-30-billion-custom-chip-market-with-new-unit-reuters.html
