Nvidia – which roughly translates to “jealousy” in Latin – has its own AI moment. Shares of the chipmaker are up almost 30% year to date, reaching $624.65 on Monday, January 29.
Microsoft and Meta are spending the most on the company’s H100 processor, a coveted $30,000 chip that powers generative artificial intelligence products. According to a report by financial services firm DA Davidson, the two companies spent $9 billion on these heated chips in 2023. But these buyers are also building own AI chips, which raises questions about Nvidia’s long-term revenue growth.
While tech companies have been quick to announce fresh AI assistants and whatnot, Nvidia is one of the few that is actually making money from generative AI. In the three months ending October 29 last year, his revenues greater than tripled from the same period in 2022
Technologists have their own AI chips
But other tech players they are catching up with Nvidia.
At least four tech giants —Microsoft, Google, AmazonAND Meta—they unveiled their own AI chips last year, and some are still in development. This allows them to reduce their dependence on Nvidia and reduce the cost of developing artificial intelligence models.
Nvidia also faces increasing competition from chipmakers such as AMD and Intel.
Will Nvidia’s boom last?
The report shows that for Nvidia to maintain its current revenue levels, its largest customers – the world’s Meta and Microsoft – would need to raise their capital spending with the chipmaker. Otherwise, other customers would have to spend enough on data center and other equipment to make up for the shortfalls of gigantic tech companies.
