AI Chip Surge Pushes Nvidia Into Record-High Profits
Due to the boom in demand for its AI chips, tech giant Nvidia officially became the ninth company to join the $1 trillion company club on May 30th.
Founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem, their initial vision was to bring 3D graphics to gaming and other multimedia markets. However, their very first project, the NV1, was a huge failure that cost them $10 million. It wasn’t until the release of their RIVA series GPUs in 1997 that they became a technological force in the gaming industry. Since then, they have become more and more popular with each release, gaining their reputation for being one of the best GPUs on the market.
With their establishment at the top of the gaming tech industry, Nvidia has branched out into other areas in order to keep ahead of the growing and changing market. Most notable is their work in AI. Around 2012, the company started to invest its time and effort into AI, with its GPUs being used by a wide variety of companies nationwide in different ways.
Jensen Huang, Nvidia’s CEO, said, “The computer industry is going through two simultaneous transitions — accelerated computing and generative AI.”
Generative AI is a type of artificial intelligence that can generate and create new content like text, images, videos, 3D models, and even code based on what the user inputs and what data it was trained with. It uses use neural networks to identify the patterns and structures within existing data to generate new and original content.
Along with generative AI, the metaverse is becoming an increasingly popular concept. The metaverse means different things to different people, but it boils down to an evolution of the internet that brings about 3D-enabled digital spaces with virtual or augmented reality in order to have personal and business experiences online. Essentially, AI is a part of the metaverse, so they’re interconnected.
Nvidia is putting itself into both of computing and AI market with its newest GPUs, including the A100 Tensor Core GPU and its very own omniverse. Powered by the NVIDIA Ampere Architecture, the A100 Tensor Core GPU is the engine of their data center platform.
According to Nvidia, the A100 “delivers unprecedented acceleration—at every scale—to power the world’s highest performing elastic data centers for AI, data analytics, and high-performance computing (HPC) applications.”
This GPU is becoming the new standard training engine for many AI programs, one of the most prominent being ChatGPT.
They also have their own AI enterprise that offers 100+ frameworks, pre-trained models, and development tools to streamline the development of AI systems.
More and more companies are starting to incorporate Nvidia chips and their AI enterprise into their operating systems. Microsoft is partnering with them in order to integrate the NVIDIA AI Enterprise software into Microsoft’s Azure Machine Learning.
With big tech companies like Google, Apple, and Microsoft all racing to incorporate AI into their, Nvidia’s GPUs have become the head of the market, making their revenue and stock skyrocket. Common Nvidia stock is at the highest it has ever been, with its peak closing price reaching $401.11 back in May.
Nvidia’s revenue rose 19% from the previous quarter to $7.2 billion, while profit jumped 44%, with its stock being up 110% this year and is expected to continue rising as the demand for AI increases.