Exclusive-Nvidia pursues $30 billion custom chip opportunity with new unit -sources
By Max A. Cherney and Stephen Nellis
SAN FRANCISCO (Reuters) -Nvidia is building a new business unit focused on designing bespoke chips for cloud computing firms and others, including advanced artificial intelligence (AI) processors, nine sources familiar with its plans told Reuters.
The dominant global designer and supplier of AI chips aims to capture a portion of an exploding market for custom AI chips and shield itself from the growing number of companies pursuing alternatives to its products.
The Santa Clara, California-based company controls about 80% of high-end AI chip market, a position that has sent its stock market value up 40% so far this year to $1.73 trillion after it more than tripled in 2023.
Nvidia (NASDAQ:NVDA)'s customers, which include ChatGPT creator OpenAI, Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META), have raced to snap up the dwindling supply of its chips to compete in the fast-emerging generative AI sector.
Its H100 and A100 chips serve as a generalized, all-purpose AI processor for many of those major customers. But the tech companies have started to develop their own internal chips for specific needs. Doing so helps reduce energy consumption, and potentially can shrink the cost and time to design.
Nvidia is now attempting to play a role in helping these companies develop custom AI chips that have flowed to rival firms such as Broadcom (NASDAQ:AVGO) and Marvell (NASDAQ:MRVL) Technology, said the sources, who declined to be identified because they were not authorized to speak publicly.
«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,» Greg Reichow, general
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