How a Shifting AI Chip Market Will Shape Nvidia’s Future
The AI chip battle that Nvidia has dominated is already shifting to a new front—one that will be much larger but also more competitive. Nvidia built itself into a $2 trillion company by supplying the chips essential for the incredibly complicated work of training artificial-intelligence models. As the industry rapidly evolves, the bigger opportunity will be selling chips that make those models run after they are trained, churning out text and images for the fast-growing population of companies and people actually using generative AI tools.
Right now, that shift is adding to Nvidia’s blockbuster sales. Chief Financial Officer Colette Kress said this past week that more than 40% of Nvidia’s data center business in the past year—when revenue exceeded $47 billion—was for deployment of AI systems and not training. That percentage was the first significant indication that the shift is under way.
Kress’s comments allayed some concerns that the shift toward chips for deploying AI systems—those that do what is called “inference" work—threatens Nvidia’s position because that work can be done with less-powerful and less-expensive chips than those that have made Nvidia the leader of the AI boom. “There is a perception that Nvidia’s share will be lower in inferencing vs. training," Ben Reitzes, an analyst at Melius Research, said in a note to clients.
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