Nvidia Corp. NVDA is experiencing a surge in revenue, with its AI business leading the charge. This has prompted its competitors, Intel Corporation INTC and Advanced Micro Devices Inc. AMD, to intensify their efforts to challenge Nvidia’s market dominance.
What Happened: Nvidia’s revenue has more than tripled for the third consecutive quarter, with a promising outlook for the rest of the year.
The company’s data center business alone raked in a record $47.5 billion in 2023, driven by the demand for computing power to train AI models. This figure represents a staggering 427% year-on-year increase.
Despite Nvidia’s commanding position in the AI training space, its competitors are exploring other avenues. One such area is AI-capable PCs, with Microsoft Corp. MSFT recently unveiling PCs powered by its AI platform, Copilot. This move is expected to drive significant demand in the emerging segment.
Both Intel and AMD have also entered the AI PC market, with each claiming to have developed the first AI PC chip, according to Nikkei Asia.
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Intel has committed to shipping chips for over 100 million AI PCs by 2025, including more than 40 million in 2024 alone. AMD, on the other hand, has not provided any guidance on AI PC shipping volumes but has expressed optimism about the segment’s potential.
"We know that Nvidia today is the market leader in terms of market share. It’s a factual statement that they have a dominant market share position," Andrew Dieckmann, corporate vice president and general manager of AMD’s data center business unit, told Nikkei Asia.
But AMD is gunning for the second spot. “You have to start with being a credible No. 2," he said.
Why It Matters: Following Nvidia’s blowout quarter, Wedbush analyst Dan Ives predicted that the AI revolution will lead to trillion-dollar valuations in tech, stating that “the party’s just getting started.”
This sentiment is echoed by Michael Burry, who sees Nvidia and AMD as the most obvious AI investment opportunities.
Despite Nvidia’s current dominance, there are indications that the AI market could be more fragmented and slow to develop than anticipated. As the AI PC segment is still in its early stages, it remains to be seen who will emerge as the leader in this space.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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