- Nvidia is in talks with tech giants like OpenAI and Google to develop custom AI chips.
- This could pose a threat to custom chip competitors like Broadcom, Reuters reported.
- This comes as Nvidia seeks to solidify its top position in the semiconductor production market.
With the boom in the AI field, Nvidia has increasingly dominated the niche artificial intelligence chip market. This has helped drive the company's stock price up more than 200% in the last year as companies pay for the company's specialty semiconductors.
Nvidia, which now had a market capitalization of nearly $1.8 trillion on February 9, is moving to gain a foothold in the custom AI chip market and wants to work with the world's most powerful technology companies to do so. ing.
The company is in talks with Meta, Microsoft, Google and open AI leaders to develop custom chips for data centers, two people familiar with the matter told Reuters. Nvidia plans to create a new business unit dedicated to designing such chips and AI processors for cloud computing companies, people familiar with Nvidia's plans told Reuters. Discussions are taking place.
Microsoft, Google, and OpenAI did not respond to requests for comment from Business Insider. Meta and Nvidia declined to comment.
Nvidia's focus on developing custom chips is partly because companies are already looking for semiconductors for specific needs and are turning to competitors like Broadcom and Marvell Technology to do so. .
Instead of trying to get their hands on Nvidia's expensive and coveted H100 and A100 graphics processing units (GPUs), technology companies are collaborating with Nvidia's rivals to reduce energy consumption and lower costs. , can build chips that can save production time.
“If you're serious about optimizing things like power and optimizing application costs, you can't just throw an H100 or an A100 at that,” says Greg, general partner at venture capital firm Eclipse Ventures. Reichow said. he told Reuters. “We want to have exactly the right mix of computing and the kind of computing that we need.”
One analyst told Reuters the custom chip market could be worth $30 billion in 2023. And it is expected to jump another $10 billion this year and double that amount by 2025, another person told Reuters.
Nvidia's move into the custom chip market bodes badly for other manufacturers.
“Broadcom's custom silicon business is $10 billion and Marvell's is about $2 billion, so this is a real threat to them,” Dylan Patel, founder of semiconductor research group Semianalysis, told Reuters. ” he said. “That's a really big negative. It's bringing more competition into the fray.”
Nvidia isn't just working with big tech companies. The semiconductor giant is also in talks with companies in the telecommunications, automotive and video game industries, according to Reuters.
Nvidia's success to date has been partially due to the company's chips being in limited supply, with companies scrambling to buy them so they can build and train their own AI models. There is. Companies like Meta are stockpiling his Nvidia GPUs to stay ahead of competitors in the AI space.
To increase global supply, OpenAI CEO Sam Altman announced this week that the company aims to raise up to $7 trillion to address the shortage. The people behind ChatGPT are in talks with potential investors, including the United Arab Emirates government, to achieve that goal.
Nvidia also has plans to address the mismatch between supply and demand. The company announced last October that it would build a so-called AI factory. CEO Jensen Huang said these can support powerful training efforts that the company believes can make the AI behind cutting-edge machines like self-driving cars smarter. The company is also turning to its own AI to manufacture its own AI chips more quickly.
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