How Nvidia built a competitive moat around AI chips
Nvidia, the world's leading maker of chips tailored for artificial intelligence.
At a startup that was later bought by the semiconductor giant Intel, Rao worked on chips intended to replace Nvidia's graphics processing units, which are components adapted for AI tasks like machine learning. But while Intel moved slowly, Nvidia swiftly upgraded its products with new AI features that countered what he was developing, Rao said.
After leaving Intel and leading a software startup, MosaicML, Rao used Nvidia's chips and evaluated them against those from rivals.
He found that Nvidia had differentiated itself beyond the chips by creating a large community of AI programmers who consistently invent using the company's technology.
«Everybody builds on Nvidia first,» Rao said. «If you come out with a new piece of hardware, you're racing to catch up.»
Over more than 10 years, Nvidia has built a nearly impregnable lead in producing chips that can perform complex AI tasks like image, facial and speech recognition, as well as generating text for chatbots like ChatGPT.
The one-time industry upstart achieved that dominance by recognizing the AI trend early, tailoring its chips to those tasks and then developing key pieces of software that aid in AI development.
Jensen Huang, Nvidia's co-founder and CEO, has since kept raising the bar. To maintain its leading position, his company has also offered customers access to specialized computers, computing services and other tools of their emerging trade.
