Nvidia is the Next AI BigTech Company

In the early 2020s it appears that Nvidia will completely disrupt Intel and simultaneously become a BigTech company in the highest pantheon of profitability as an AI-chip leader.

Nvidia plans to make its own server central processor, called Grace, based on ARM technology. The company is best known for graphics processors and chips for artificial intelligence, not the CPUs that power the heart of servers. The new processor is its first data center CPU, challenging Intel in a market which it dominates with more than 90% market share.

With a global chip shortage, Taiwan Semi and Nvidia should do exceedingly well. Intel reported $26.1 billion in revenue from its data center group in 2020, up 11% year over year. Nvidia has a new chip in the works for boosting artificial intelligence and other high-performance computing work: Grace, a design slated to arrive in mammoth supercomputers in 2023.

This will solidify Nvidia as a BigTech company that’s truly in a class of its own in its verticals. It’s stock is $608 but it’s pace of innovation means that it will soon be a $1,000 stock. Nvidia’s market cap is $377 Billion but that won’t be that low for long.

Nvidia’s Grace Chips Could be a Paradigm Shift for AI and Supercomputing

Nvidia Corporation focuses on personal computer (PC) graphics, graphics processing unit (GPU) and also on artificial intelligence (AI). However it’s trajectory is really multifold and it’s one of the most innovative companies in the U.S. today.

  • Grace is designed to fill the CPU-sized hole in NVIDIA’s AI server offerings. The company’s GPUs are incredibly well-suited for certain classes of deep learning workloads, but not all workloads are purely GPU-bound, if only because a CPU is needed to keep the GPUs fed.
  • Nvidia said that researchers including the U.S. Department of Energy’s Los Alamos National Laboratory plan to build supercomputers using the Grace chips.
  • With sales of $16.7 Billion Nvidia will keep maturing in the 2020s to become one of the most important BigTech companies.

The new chip should let AI customers run computing tasks that are vastly more complex than is possible with today’s chip designs, a step toward the general artificial intelligence that is the holy grail of today’s machine learning research, said Cambrian AI Researach analyst Karl Freund in a blog post.

Nvidia has close to 19,000 employees. Their gross margin is 62%. Their Omniverse Enterprise suite for real-time, photorealistic graphics design is truly a collaborative and B2B work of art. The Nvidia Omniverse Enterprise package includes the Nvidia Omniverse Nucleus server, which is used to manage shared databases among client.

Nvidia’s Atlan chip should boost self-driving cars in 2025. Nvidia said last year that it plans to buy ARM for $40 billion, and the company would continue to license its technology to chipmakers that rely on it.

The company is an Earnings champion and is showing real innovation in its incredible growth that could make new kinds of AI processing possible. Nvidia’s revenue in its fiscal first quarter which ends in May could be as much as $6 Billion. Nvidia’s total revenue in its fiscal fourth quarter was up 61%. Nvidia is getting too big to fail and is a better bet instead of Tesla to enter rarified company as a BigTech leader.

Nvidia is currently the 12th largest company on the S&P but in reality will leap-frog the rest to enter into the number six spot in a matter of a few years. It’s the 6th BigTech company of the future of artificial intelligence. In the global chip shortage innovation will occur in ways we may not yet recognize and Nvidia is the best bet to be part of that movement. It’s becoming the best pure-play AI company in the world and among the least likely of business models to ever face anti-competitive regulations.

Jensen Huang is creating a generational chip company with room to grow in multiple sectors with a TAM that scales very well into the 2030s. Nvidia Grace for data centers essentially promises 10x the performance of ‘today’s fastest servers’ for AI and HPC.

The new Grace is named after computing pioneer Grace Hopper, and it’s coming in 2023 to bring “10x the performance of today’s fastest servers on the most complex AI and high performance computing workloads,” according to Nvidia. A Grace Next is already on the roadmap for 2025.

Nvidia will be the largest chip company so far to challenge Intel in its key market and there’s every indication Intel will never be the same. Nvidia’s entry into the market could hasten Arm’s inroads into data centers and Taiwan Semiconductor Manufacturing Company is expected to continue its stellar growth as well as the global chip shortage of 2021 complicates many emerging digital transformation sectors.

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