Nvidia to Launch Unit Devoted to Building Custom HPC Chips

Nvidia is investing $30 billion in a new business unit focused on custom chips for high-performance computing. The company already controls about 80 percent of the advanced chip market but wants to avoid losing ground as alternatives spring up. Alphabet, AWS, Intel and AMD market high-end processors to third-parties, and Meta is expected to begin deploying its own Artemis AI chips this year. Nvidia has had discussions with Amazon, Google, Meta, Microsoft and OpenAI about helping them create bespoke chips and is also talking to automakers, cloud service providers (CSPs) and telecom companies, according to reports.

Nvidia’s H100 and A100 chips are viewed as all-purpose AI chips for many customers, and buyers including Meta, Microsoft, OpenAI and Alphabet continue to snap up as much inventory as they can get. But Nvidia appears to be proactively seeking to expand its customer base as it anticipates certain existing areas may eventually contract.

“The tech companies have started to develop their own internal chips for specific needs,” reports Reuters, noting that “doing so helps reduce energy consumption, and potentially can shrink the cost and time to design.” Nvidia now wants “to play a role in helping these companies develop custom AI chips that have flowed to rival firms such as Broadcom and Marvell Technology.”

Many tech firms see purpose-built, custom chips as a cost-effective alternative to Nvidia, whose H100 chips can sell for $16,000 to $100,000 apiece, “depending on volume and other factors,” writes Reuters. Meta has said it will purchase 350,000 H100s this year.

“While all leading CSPs use Nvidia’s A100 and H100 processors for AI and high-performance computing (HPC) workloads, many of them, including Amazon Web Services, Google, and Microsoft are also deploying their own custom processors for AI and general-purpose needs,” Tom’s Hardware writes, explaining that allows them to “tailor their data centers’ capabilities, and optimize performance and power consumption, saving great sums of money.”

Nvidia VP Dina McKinney, who previously worked at AMD and Marvell, has been selected to run the new unit, “and her team’s goal is to make its technology available for customers in cloud, 5G wireless, video games and automotive, a LinkedIn profile said,” according to Reuters.

Nvidia overtook both Alphabet and Amazon in market capitalization this week, with Bloomberg valuing the Santa Clara, California-based chip maker’s stock at $1.83 trillion. “This makes Nvidia the world’s fourth most valuable company in the wake of the AI boom, after Microsoft ($3.04T), Apple ($2.84T) and Saudi Aramco,” per The Verge.

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