In the battle for semiconductors, the success of artificial intelligence is turning the competition deck


Nvidia President Jensen Huang at the Computex Conference in Taipei, Taiwan, May 29, 2023.

At Nvidia, the counters are in a panic. The American company, which has historically been known for establishing itself thanks to its expertise in the field of graphics cards, appreciated by video game enthusiasts, has also managed to establish itself in another sector: artificial intelligence (AI). More precisely in generative AI, recently symbolized by software such as ChatGPT-4, which is capable of producing natural language texts in a persuasive manner based on simple requests such as “Write me a poem with ‘oir’ rhymes” or “Give me a realistic description of a pasta dish”.

Achieving such performance requires massive computing power enabled by new generations of semiconductors, often provided by Nvidia. Its chips, the A100 ($10,000 each, or €9,300) and more recently, the H100 ($40,000 each) are market standard.

On Wednesday, May 24, the company announced an optimistic forecast amid the euphoria around generative AI. For the next quarter, the company expects revenue of $11 billion, 50% higher than analyst expectations. At the same time, its president, Jensen Huang, indicated that Nvidia was tryingSignificantly increasing its production capacity to meet the growing demand..

Also read the report: The material is reserved for our subscribers Artificial intelligence is changing Nvidia’s business

An effort that the company can afford. In fact, its share price has more than doubled since the beginning of 2023, bringing its market capitalization to $963 billion. On Tuesday, May 30, it became the first company in the sector to cross the 1000 billion barrier in terms of capitalization, far surpassing Intel (120 billion), whose revenues ($63 billion for the fiscal year 2022) more than doubled. That Nvidia ($ 27 billion).

Fear of imperfection

It’s all about going. The enthusiasm for artificial intelligence is an opportunity to seize the chip market, which has always been driven by smartphones and computers, two markets that are saturated now, and even more so after the Covid-19 period, which accompanied a stage of over-equipment. Other openings present themselves to allow the industry to rebound, such as semiconductors for cars or connected things.

However, artificial intelligence is currently the most dynamic engine in this sector and can change the playing cards of the competition. For Jensen Huang, the revolution in AI work is equivalent to the one shaped by the iPhone’s arrival in the mobile industry. As is often the case in technology, first mover has a huge advantage. But Mr. Huang is unaware of the competition that awaits him: “It comes from all directions.”

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