Nvidia: chipmaker’s strategic AI moves result in a tech position of power

theguardian.com:

Nvidia saw its valuation soar to $1tn on Tuesday, making it the fifth most valuable American company and one of the first major corporate beneficiaries of the hype around AI.

The chipmaker has been a major and in some cases dominant player in several industries for years. But no development has raised its profile – and its potential windfall – as much as the current excitement around generative AI.

Nvidia has been around for 30 years. The company got its start in 1993 building graphics processing units (GPUs) for video games. It came to command the space, and over time expanded its operations by repurposing those chips to help power automated driving systems such as those in Tesla vehicles as well as data centers. Today, Nvidia’s chips power many of the systems households around the world interact with on a daily basis.

While competing chipmakers such as Intel, Micron Technologies and Advance Micro Devices (AMD) spent the past years battling for marketshare in spaces with existing demand like powering data centers, Nvidia invested in building and developing chips that can power various AI use cases.

The strategy means the company now has the upper hand, said Wedbush Securities managing director and senior equity research analyst Dan Ives. “In terms of scale, scope and the ability to integrate the data, Nvidia is essentially the only game in town.”

To build ChatGPT, OpenAI relied on thousands of Nvidia chips, according to Reuters. Elon Musk, who has a long history of partnering with Nvidia to power Teslas, has also acquired Nvidia chips for his own AI startup, according to the Financial Times.

In the May earnings call that sparked Wall Street’s enthusiasm for the company, Nvidia CEO and co-founder Jensen Huang said the firm