A new technological power. They left Google and Amazon behind. They have an appetite for more

A new technological power. They left Google and Amazon behind. They have an appetite for more

Nvidia, previously associated with graphics cards and the gaming industry, is currently experiencing the best period in its 30-year history. And it’s all thanks to the AI ​​revolution, in which chips produced by the American company play the leading role. However, Nvidia’s ambitions are even greater.

Nvidia is on a path of almost continuous growth. Suffice it to say that since the beginning of the year, the company’s shares on the NASDAQ stock exchange have increased by over 44 percent. However, if we look at the last 12 months, we are dealing with an increase of over 250%.

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Last week, the market capitalization of the graphics and AI chip maker exceeded $1.8 trillion for the first time in history. Thus, Nvidia overtook both Alphabet and Amazon, and for a few days became the third most expensive American company listed on the stock exchange – after Microsoft and Apple.

The situation is paradoxical because this unprecedented growth of Nvidia is ensured by its largest rivals, who use AI chips produced by the Santa Clara company to create generative artificial intelligence tools, such as ChatGPT (OpenAI/Microsoft), Gemini (Google) or Copilot (Microsoft). ).

Nvidia photo: Investing.com

There is only one king of AI

To say that Nvidia is a monopoly in the AI ​​chip industry today is an understatement. The company has about 80 percent of the market share in these devices, and there are queues of people waiting for its most popular H100 and A100 systems.

For example, Meta, the owner of Facebook, intends to buy as many as 350,000 A100 chips this year alone. Although Nvidia does not officially provide prices for these units, it is estimated that one system costs from $16,000 to even $100,000 (depending on the volume and a number of other factors).

Experts point out that Nvidia is winning the war for the artificial intelligence market today, because its largest competitor AMD focuses almost exclusively on the consumer market. And although companies such as Google and Microsoft are thinking about producing their own systems to become independent from Nvidia, currently the Santa Clara company is the only one that has the know-how and technology to produce AI chips on a mass scale.

And it will produce more of them. that Nvidia intends to invest $30 billion in the design of new custom chips. This includes both AI chips and systems designed for data processing in the cloud.

According to reports from Reuters, Nvidia representatives have already met with partners from Google, Meta, Amazon, Microsoft and OpenAI to better understand the expectations of these companies and design proprietary systems that would meet these expectations.

Later this year, Santa Clara also plans to release the H200 system, the successor to the H100. As the company boasts, the new chip is almost twice as fast as its predecessor.

Eos ‘arrive at the perfect time’

Nvidia does not intend to stop at being a supplier of components to other companies. The company wants to actively participate in the artificial intelligence revolution. Last year, the manufacturer presented its own Eos supercomputer, which specializes in, among others, in training generative artificial intelligence models.

Last week, Nvidia also published a video for the first time in which it boasts about Eos’ capabilities – and they are powerful. Named after the Greek goddess of the dawn, the computer is equipped with 576 Nvidia DGX H100 systems, each of which consists of eight H100 Tensor Core processors, which are supported by 1,152 Intel Xeon Platinum 8480C processors.

Nvidia’s hardware achieves FP64 Rmax computing power of 121.4 PFLOPS, which makes it instantly rank among the top ten most powerful supercomputers in the world (ranking 9th). In AI calculations, the computer achieves a computing power of up to 18.4 EFLOPS.

“Eos arrives at the perfect time. People are changing the world with generative AI, from drug discovery to chatbots to autonomous machines and more,” explains Nvidia.

To achieve these breakthroughs, they need more than just AI expertise and programming skills. They need an AI factory – a purpose-built AI engine that is always available and can help expand their ability to create AI models at scale

– explains the company.

The results the whole world is waiting for

On Wednesday, after the close of the session on American stock exchanges, Nvidia will present its financial results for the last quarter. Experts have no doubt that this week is the most important event in the world of business and finance.

Not only the ongoing AI boom in the US, but also the broad market sentiment depends on the results of the AI/chip tycoon in the US.

– notes Konrad Ryczko, analyst at DM BOŚ, in his market commentary.

Market expectations towards Nvidia are high. Economists forecast earnings per share of $4.62, or 15.2 percent. higher than in the previous quarter and over 426 percent (sic!) higher than a year earlier. Moreover, it is worth noting that in recent quarters, Nvidia’s results have always exceeded the market consensus. Some people warn that even a slight disappointment with Wednesday’s results may have a strong impact on the company’s shares.

The market recognizes Nvidia as the king of artificial intelligence. However, if Nvidia delivers one bad quarterly report, if it doesn’t exceed investor expectations excessively, the device could sell for 20-30 percent in a single after-hours session

– notes Jake Dollarhide, CEO of Longbow Asset Management in Tulsa,

Source: Gazeta