Nvidia To Continue Running The Generative AI Chip Show For The Foreseeable Future

According to Grand View Research, the AI market is projected to grow at a CAGR of 37% throughout the end of the decade. Leading the game is Nvidia Corporation NVDA with its many rivals struggling to gain ground in the generative AI chip war, including Advanced Micro Devices Inc AMD, Intel Corporation INTC, Microsoft Corporation MSFT and Amazon.com Inc AMNZ. 

AMD Is Making Big Promises

Year-to-date, AMD stock skyrocketed 87% mainly thanks to its AI momentum because its hardware can run and develop AI models, giving it massive growth potential with its ability to supply chips to the entire market. However, AMD is behind Nvidia on this front and it recently revealed its most advanced graphics processing unit GPU to boost its competitiveness. Besides promising to challenge Nvidia’s flagship H100 across several measures, the new MI300 chip will be powering the world's fastest supercomputer whose online debut is expected later this year. Reuters reported that the cloud titan, Amazon Web Services, is considering to use AMD-made hardware. AMD's prospects in AI have grown stronger after Microsoft supported its AI expansion with financial and engineering resources. 

Microsoft Is Reinventing Itself With AI 

Microsoft got its AI glory back in 2019 due to investing $1 billion in the start-up that created ChatGPT. Open AI models that Microsoft integrated across its offerings provided the company with a massive competitive advantage over Amazon and Google. Its CEO, Satya Nadella continues to reinvent the software titan and he is using AI on his quest. Microsoft Chairman and CEO dreams of an AI world where every citizen on the planet having an AI doctor, tutor and maybe even a consultant so there's no doubt about the direction where Microsoft is going.

Amazon Is Using Its Core Powers For AI Leadership

AWS' leading 32% market share in the cloud industry makes Amazon well-positioned to profit significantly from the development of AI. Moreover, the e-commerce titan has long used this technology to increase the efficiency of its operations and quality of service to its shoppers. Amazon online retail website utilizes AI to provide product recommendations, as well as to determine when specific products will be in demand to optimize its fulfillment centers. Therefore, Amazon’s competitive power in AI actually comes from its e-commerce and cloud leadership. 

Nvidia Will Still Be Running The Generative AI Chip Playground For The Foreseable Future

By the time AMD’s new chip becomes available at the beginning of 2024, Nvidia’s H100 will have already been in the market for a year and a half, which gives it plenty of edge. AMD and Intel are in fact betting on an evolution in the generative AI market to lift demand for other types of processors but they are also facing a scary software challenge. Nvidia’s chips are widely used due to the ease with which its GPUs, that were originally designed for video gaming, can be programmed to perform other tasks thanks to the Cuda software. This is why analysts such as Stacy Rasgon from Bernstein, believe that there will be a decade before Nvidia’s rivals can catch up, but during this time, it’s certain that Nvidia will continue working to cement its leadership. For the time being, the booming generative AI chips market belongs to Nvidia. But even Intel was once an undisputable leader that is now far behind both Nvidia and AMD, despite its undergoing strategy shift. While the once-leader who aspires to make the best CPU and the best GPU on the market brings out its Nvidia-contender in 2025, Nvidia will probably get another chip out. By the looks of it, the not-so-distant AI chip future belongs to Nvidia.

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.