AI is moving out of the data Center. How Nvidia wants to keep its edge.
Subscribe to enjoy similar stories. Nvidia is fighting to hang onto its command of artificial intelligence, as the technology evolves to chips outside of the data center. Major tech companies have been racing to build data centers, the facilities where AI models are trained and run globally—and where Nvidia’s AI chips dominate.
But as AI technology rapidly develops, the data center—and in turn, Nvidia—face new competition. It all comes down to where the process of generating answers from AI models, known as “inference," takes place. Right now, inference is largely happening in data centers.
But in the future, powerful chips from companies such mobile-chip specialist Qualcomm could move inference out of data centers and onto smartphones and personal computers. The stakes for the booming AI inference market are high—inference already makes up around 40% of Nvidia’s data-center revenue and growing fast. It won’t be long before it overtakes training models as the principal source of AI revenue for chip players.
“There’s a higher-level battle ongoing between Nvidia and Qualcomm here," wrote technology analyst Dean Bubley, founder of Disruptive Analysis. The biggest change in AI this year has been the introduction of so-called reasoning models, a new technique for inference. These models break down problems step-by-step, using much more computing resources than earlier AI models—as much as 100 times more, according to Nvidia CEO Jensen Huang.
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