With the AI boom, Nividia has managed to capture a significant share when it comes to making
AI chips
. However, the chipmaker now plans to strengthen its position by entering the
custom AI chip sector
. Reuters has reported that the company is in talks with
industry leaders
like Meta, Microsoft, Google, and OpenAI to co-design custom chips for
data centres
.
.
Nvidia
is also planning to establish a dedicated business division, Nvidia aims to cater to the demand for semiconductors tailored to specific enterprise needs. Companies are exploring alternatives to Nvidia's high-demand H100 and A100 GPUs, turning to rivals like Broadcom and Marvell Technology for custom solutions that optimise energy consumption and reduce costs.
Nvidia’s move threatens competition
The custom chip market, valued at $30 billion in 2023, is anticipated to grow by an additional $10 billion in 2024, doubling by 2025. This move by Nvidia poses a threat to competitors such as Broadcom, with a $10 billion custom silicon business and Marvell with a $2 billion business, according to semiconductor research group SemiAnalysis.
Nvidia's expansion isn't limited to major tech companies, as discussions extend to businesses in telecommunications, automotive, and video games. The company's success, driven by a limited chip supply, has prompted competitors to seek alternatives. To address the supply-demand gap, Nvidia plans to build AI factories capable of supporting high-powered training for advanced technologies like autonomous cars.
As Nvidia diversifies its influence in the custom AI chip market, competition is expected to intensify, reshaping the semiconductor industry. The move signifies a shift toward tailored solutions, addressing the specific needs of enterprises across various sectors.
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