In the battle of semiconductors, the success of artificial intelligence reshuffles the cards of the competition

At Nvidia, the counters are panicking. The American company, historically known for having established itself thanks to its expertise in graphics cards, appreciated by video game enthusiasts, has since succeeded in establishing itself in another sector: artificial intelligence (AI). More precisely in generative artificial intelligence, symbolized in recent times by software such as ChatGPT-4, capable of producing, in a convincing way, texts elaborated in natural language on the basis of requests as simple as “Write me a poem with ‘oir’ rhymes” or “Give me a realistic description of a plate of pasta”.

Achieving such performance requires phenomenal computing power enabled by new generations of semiconductors, often supplied by Nvidia. Its chips, the A100 (10,000 dollars each, or 9,300 euros) and, more recently, the H100 (40,000 dollars each) are benchmarks on the market.

On Wednesday, May 24, the company reported optimistic forecasts amid euphoria around generative AI. For the next quarter, the company forecasts revenues of $11 billion, 50% above analysts’ forecasts. At the same time, its boss, Jensen Huang, indicated that Nvidia was trying to“significantly increase its production capacity to meet growing demand”.

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An effort that the company can afford. Indeed, its share price has more than doubled since the start of 2023, reaching a market capitalization of $963 billion. On Tuesday, May 30, it became the first company in the sector to exceed the 1,000 billion mark in capitalization, very far ahead of an Intel (120 billion) whose revenues (63 billion dollars for the 2022 financial year) are however more than twice that of Nvidia ($27 billion).

Fear of a shortage

It’s all about going. The fervor for artificial intelligence represents an opportunity to seize for the chip market, which has long been driven by smartphones and PCs, two markets that are now saturated, even more so after the Covid-19 period, which has is accompanied by a phase of over-equipment. Other openings present themselves to allow this industry to rebound, such as semiconductors devoted to automobiles or connected objects.

However, AI is currently the most dynamic engine in the sector and could reshuffle the cards of the competition. For Jensen Huang, the revolution at work in AI is equivalent to that constituted by the arrival of the iPhone in the mobile phone industry. And, as is often the case in technology, the first mover has a considerable advantage. But Mr. Huang is not unaware of the competition that awaits him: “It comes from all directions. »

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