Companies
Nvidia is getting into ‘custom chip services’
Nvidia forms a new division for custom chip design, seeking to maintain AI chip leadership amid heightened industry competition.
Headline
Nvidia forms a new division for custom chip design, seeking to maintain AI chip leadership amid heightened industry competition.
Context
According to media reports, up to nine sources revealed that Nvidia is establishing a new business division focused on designing custom chips for cloud computing and advanced artificial intelligence (AI) processors. This move is expected to further solidify Nvidia’s leadership position in AI chips, with recent years seeing companies like OpenAI , Microsoft, Google, Meta, among others, racing to acquire Nvidia’s graphics processing units (GPUs) to compete in the AI field, propelling its market value to $1.7 trillion, making it one of the “Big Seven” in the US stock market.
Evidence
Pending intelligence enrichment.
Analysis
As Nvidia’s H100 and A100 are general-purpose AI accelerators, some tech companies have begun developing their own internal chips for specific needs to reduce power consumption and lower costs. Sources said Nvidia sees an opportunity in this and plans to help these companies develop custom AI chips. Also read: Nvidia’s historic surge with AI-powered chip ignites investor frenzy While Nvidia has not disclosed prices, the H100 is expected to be expensive. Greg Reichow, partner at venture capital firm Eclipse Ventures, said if companies want to optimise power or cost, they shouldn’t buy generic H100 or A100, “because you only need their computing power.” Two sources said Nvidia executives have met with representatives from companies like Amazon , Meta, Microsoft, Google, and OpenAI to discuss manufacturing custom chips for them. Besides data centre chips, Nvidia is also seeking clients from the telecommunications, automotive, and video game industries.
Key Points
- Nvidia is establishing a new division for custom chip design targeting cloud computing and AI processors, aiming to reinforce its dominance in AI chips.
- The move comes amidst heightened competition from tech giants like Microsoft, Google, and Meta, all vying for Nvidia’s GPUs to bolster their AI capabilities.
- Nvidia’s expansion into custom chip design extends beyond data centres to potential clients in telecommunications, automotive, and gaming industries, including rumoured collaboration with Nintendo for its upcoming Switch console.
Actions
Pending intelligence enrichment.
