Nvidia to design tailor-made AI chips for cloud computing firms

Nvidia is creating custom chips for cloud computing and advanced AI to stay ahead of the competition.

By Sunil Sonkar
2 Min Read
Nvidia to design tailor-made AI chips for cloud computing firms

Nvidia, which has emerged as a major AI chips maker, is starting a new part of their business. They want to design special chips for cloud computing and other areas like advanced AI. This is because they want to keep their top spot in the market, especially as more competition comes up with their own chip options.

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Nvidia’s market share is 80 percent with respect to the high-end AI chip supplying. This strong position has really boosted its value. This year, its value went up by 40% to $1.73 trillion, after increasing more than three times in 2023. Major tech giants such as OpenAI, Microsoft, Alphabet and Meta Platforms, all avid consumers of Nvidia’s H100 and A100 chips, are now exploring the development of their own custom chips to optimize energy usage and reduce costs.

Nvidia’s move to help companies create unique AI chips might take customers away from rivals like Broadcom and Marvell. Dina McKinney, who worked at AMD and Marvell before, leads the team making these special chips. They’re focused on spreading Nvidia’s tech to industries like cloud, 5G, gaming, and cars.

Special chips for data centers are expected to be worth $10 billion this year and could double by 2025. The whole custom chip market was around $30 billion in 2023, which is just 5% of all chip sales worldwide.

Nvidia might not just be focusing on AI and data centers. They are talking with Ericsson about making a wireless chip with Nvidia’s technology. Also, they want to get into cars and video games. They are planning to work on the next Xbox and PlayStation consoles and a new version of Nintendo’s Switch console with a special Nvidia design.

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