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AIEdutech

Nvidia Pursues Lucrative Custom AI Chip Market With Tech Giants

Aileen Lor
Last updated: February 15, 2024 2:22 am
Aileen Lor
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2 Min Read
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  • Nvidia launches new unit for custom AI chip design.
  • It aims to leverage GPU dominance to expand into the fast-growing $30B custom chip market.
  • Nvidia risks losing share without addressing demand for specialized, lower-cost AI processors.

Contents
Aiming for specialized processors at lower costsInvestments in AI factories to leverage chip designs

Nvidia is pushing aggressively into custom artificial intelligence chip design through a new business unit, holding talks with AI powerhouses Meta, Microsoft, Google, and OpenAI on potential collaborations.

As enterprise demand for tailored AI hardware grows, Nvidia aims to leverage its GPU dominance toward the $30 billion custom chip market set to expand rapidly.

Aiming for specialized processors at lower costs

Rather than rely solely on Nvidia’s expensive off-the-shelf H100 and A100 graphic chips, tech giants want specialized processors optimized for lower costs and power needs.

Nvidia risks losing market share without addressing this appetite for bespoke AI silicon. Partnerships could let Nvidia supply custom designs to augment its AI graphics portfolio.

Investments in AI factories to leverage chip designs

The news comes shortly after OpenAI CEO Sam Altman floated a $5-7 trillion plan to scale up global chip production capacity massively. Nvidia itself is investing heavily in “AI factories” and leveraging AI for accelerated chip design to boost supply amid voracious corporate demand for AI training.

By capitalizing on custom silicon demand, Nvidia can grow its AI chip leadership beyond current standard GPU offerings.

Jointly developing custom designs with pioneering AI developers ensures Nvidia silicon remains the processor of choice powering the world’s most advanced AI systems.

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