Nvidia is currently in discussion with tech giants such as OpenAI and Google to develop customized AI chips. This move poses a challenge to competitors like Broadcom, Reuters reported. The company is aiming to solidify its position at the forefront of the semiconductor production market. With the booming AI sector, Nvidia has significantly dominated the specialized artificial intelligence chip market, which has led to a surge in its share price by over 200% in the last year. Now, with a market cap of nearly $1.8 trillion as of February 9, Nvidia is venturing into the custom AI chip market and is keen on collaborating with leading tech firms to accomplish this goal. Discussions have taken place with Meta, Microsoft, Google, and OpenAI to create custom chips for data centers, according to sources familiar with Nvidia’s plans as reported by Reuters.
Amidst the increasing demand for semiconductors that address specific enterprise needs, Nvidia is focusing on the creation of custom chips. Companies are looking to reduce their energy consumption, lower costs, and save time on production by working with Nvidia’s competitors like Broadcom and Marvell Technology. The custom chip market, estimated to be worth $30 billion in 2023, is projected to grow substantially in the coming years. This move by Nvidia could potentially pose a threat to other chip manufacturers such as Broadcom and Marvell, according to semiconductor research group SemiAnalysis’ founder Dylan Patel. Nvidia is not only targeting major tech companies but has also been engaging in talks with businesses in the telecommunications, automotive, and video game industries, as reported by Reuters.
One of the contributing factors to Nvidia’s success thus far has been the limited supply of its chips, resulting in companies scrambling to acquire them for building and training their own AI models. To address the supply-demand imbalance, Nvidia has plans to establish AI factories and utilize its own AI to speed up the production of its AI chips, CEO Jensen Huang announced in October. Additionally, in a bid to increase global supply, Sam Altman, CEO of OpenAI, is aiming to raise up to $7 trillion to address the shortage. This initiative involves engaging potential investors such as the government of the United Arab Emirates. If you are part of Nvidia and have a story to share, you can contact BI reporter Aaron Mok at amok@insider.com through a non-work email or use an encrypted messaging app Signal at 718-710-8200 using a non-work phone.