NVIDIA, the Santa Clara-based company, has been a privileged spectator in the arena of artificial intelligence (AI). As the biggest tech companies battle to make their AI applications and chatbots more user-friendly, NVIDIA reaps the benefits. Why? Because NVIDIA’s hardware powers these tools, making the company a winner, regardless of who comes out on top in the AI race.
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NVIDIA’s Dominance in the AI Sector
It’s estimated that around 80% of the GPUs used by tech giants like Google and OpenAI to train and run their language models bear the NVIDIA logo. This dominance is something few companies can boast about in their respective sectors. This favorable position has led NVIDIA to join the exclusive club of publicly traded companies valued at over a trillion dollars, a club that includes other tech giants like Apple, Alphabet, Amazon, and Microsoft.
The Birth of NVIDIA
The story of NVIDIA begins on April 5, 1993. It was founded by Jensen Huang, Chris Malachowsky, and Curtis Priem, who foresaw the PC becoming an essential device for running games, music, and images. While other major companies focused on developing CPUs (Central Processing Units) for large manufacturers, NVIDIA concentrated on GPUs (Graphics Processing Units). These have proven to be the most suitable chips for large AI models.
NVIDIA’s first product, the NV1, was launched in 1993. This GPU stood out for its ability to handle 2D and 3D video, as well as its integrated audio processing hardware. It was so innovative that Sega decided to use it in its Saturn console.
In 1997, NVIDIA introduced the RIVA 128, also known as NV3, a graphics card that achieved great success because it changed the mapping paradigm and processed frames faster.
The Vision of Jensen Huang, NVIDIA’s CEO
However, NVIDIA would have been left behind if not for the decision of its CEO, Jensen Huang. In 2006, Huang made a crucial decision: to make NVIDIA’s chips programmable. This allowed them to be adapted to different uses, such as cryptocurrency mining, and to take advantage of the burgeoning field of AI research.
NVIDIA’s Growth and Challenges
NVIDIA has grown spectacularly since then, surpassing its competitors and joining the club of companies with a market value exceeding a trillion dollars. In 2023, its AI business generated about $15 billion in revenue, a 40% increase from the previous year. As a result, its shares have soared more than 180% this year.
Only AMD seems to be a direct competitor today. However, the future is also changing for them. Both Google and Microsoft are working on what could be their own TPUs (Tensor Processing Units), a processor specifically designed for processing AI tasks that require large amounts of matrix multiplication operations.
Conclusion
Although NVIDIA is currently a successful company, it will have to continue innovating if it wants to keep feeding a sector that needs to grow non-stop to keep being talked about.
