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Emerging Technology

Nvidia Makes Moves To Address Its Chip Supply And Bring In Customization!

By TD NewsDesk

TD NewsDesk

Updated on Mon, Feb 12, 2024

Overall Rating
As the artificial intelligence (AI) race intensifies, businesses are looking to invest in AI semiconductors or AI chips to scale their efforts.

In January 2024, Meta’s Founder and CEO, Mark Zuckerberg conveyed that by the end of 2024, his company would include 350,000 H100 graphics cards, resulting in the company spending billions of dollars on Nvidia’s chips.

Of course, this doesn’t come as so much of a shock as single units of these chips sell for over $40,000 on eBay, owing to heavy demand. Additionally, Zuckerberg did mention that Meta’s biggest investment area in 2024 would be towards developing engineering and computer resources for AI.

This is just one company that’s using Nvidia’s chips, which remains the most popular chipmaker in the industry, controlling around 80% of the high-end AI chip market. This even led to Nvidia’s stock market value tripling in 2023 and growing by 40% in 2024 itself!

Yet, Nvidia faces a dilemma, as many companies are turning to developing chips internally as they require them for specific needs.

As a result, Nvidia is looking to make moves to increase its supply and address the custom requirements of its customers.

So, what is Nvidia doing? Let’s explore!

How Is Nvidia Addressing Its Chip Demand?

  • The process of designing GPUs (Graphics Processing Units) is laborious. According to Bryan Catanzaro, Nvidia's VP of Applied Deep Learning Research, each chip takes around 1,000 people to build, where each person needs to understand how different parts of the process work. 
  • Now, the leader of the AI chip industry is turning to AI to enhance its processes.
  • Nvidia developed an AI system called ChipNeMo, which is used to speed up the production process.
  • The system is built using Meta’s Llama 2 and trained on the company’s data. As such, the chatbot can respond to queries related to chip design.
  • As per Nvidia, the system has been effective in training junior engineers, however, the company refused to comment on whether the system has led to faster chip production.
  • Nvidia isn’t the first company to use AI to speed up the designing process, as Google’s DeepMind and Synopsys have attempted similar moves, while New York University has also researched how AI can be used to quicken the process.

TechDogs-"A Representative Image Of Nvidia's Logo"  

What Is Nvidia Doing To Address Chip Customization?

  • Nvidia is planning to build a new business unit that focuses on producing custom AI chips, dedicated to cloud computing companies and other businesses, according to nine sources well-versed with the plan.
  • While the company’s H100 and A100 chips are popular, they’re designed to be generalized and serve all purposes.
  • However, leading tech companies find themselves needing customized chips for specific purposes and have started developing them in-house. This results in reduced energy consumption and costs, that can reduce the time taken in design processes.
  • Nvidia held talks with industry giants like Meta, Microsoft, Google and OpenAI to build custom chips for their data centers.
  • The move comes as Nvidia looks to address the custom chip market, which was worth $30 billion in 2023 and is poised to grow by another $10 billion in 2024, while doubling that amount in 2025.
  • According to Greg Reichow, General Partner at Eclipse Ventures (a venture capital firm), “If you're really trying to optimize on things like power, or optimize on cost for your application, you can't afford to go drop an H100 or A100 in there ... You want to have the exact right mixture of compute and just the kind of compute that you need."

Do you think Nvidia’s moves will ensure it retains its position as the market leader? Will we see other tech firms leverage AI to address the demand for AI hardware and software?
Let us know in the comments below!

First published on Mon, Feb 12, 2024

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