{"id":1445,"date":"2024-02-25T00:08:52","date_gmt":"2024-02-25T00:08:52","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/02\/25\/why-everyone-is-suddenly-talking-about-nvidia-the-trillion-dollar-company-fueling-the-ai-revolution\/"},"modified":"2024-02-25T00:08:52","modified_gmt":"2024-02-25T00:08:52","slug":"why-everyone-is-suddenly-talking-about-nvidia-the-trillion-dollar-company-fueling-the-ai-revolution","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/02\/25\/why-everyone-is-suddenly-talking-about-nvidia-the-trillion-dollar-company-fueling-the-ai-revolution\/","title":{"rendered":"Why everyone is suddenly talking about Nvidia, the trillion-dollar company fueling the AI revolution"},"content":{"rendered":"
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The business world is increasingly banking on artificial intelligence to be the next big thing, and has found itself turning to one maker of computer chips in particular \u2014 Nvidia \u2014 to power the revolution.<\/p>\n

Since 1993, the Santa Clara, California-based company has been designing programmable chips that help run an array of consumer-facing applications.<\/p>\n

<\/div>\n

While Intel and Advanced Micro Devices had dominated the U.S. chip sector for decades, Nvidia\u2019s entry signaled the advent of sophisticated graphics processing units (GPUs), which were better able to render images. That capability became ever more important as high-quality video increasingly dominated the tech and media landscape.<\/p>\n

At first, Nvidia was most associated with providing GPU processors for video game consoles like the Microsoft Xbox and Sony PlayStation.<\/p>\n

The general growth of Silicon Valley during the 2010s prompted Nvidia to diversify and improve its fortunes. For example, in 2014, Nvidia and Google announced a partnership to use Nvidia chips in Google Chromebooks.<\/p>\n

Auto companies also began turning to Nvidia chips for use in driver-assistance software that depends on GPUs to process image information from sensors. Nvidia hardware is also found in all Tesla vehicles.<\/p>\n

During the pandemic, the shift to remote work and subsequent demand for data centers that could enable cloud-based computing \u2014 plus even more interest in video games while everyone was stuck indoors \u2014 accelerated Nvidia\u2019s revenues even further.<\/p>\n

Still, the company\u2019s $22 billion in annual revenues in 2022 remained dwarfed by rival Intel\u2019s $63 billion that year.<\/p>\n

It was not until the last year and a half or so that Nvidia\u2019s outlook went truly stratospheric with the onset of the artificial intelligence revolution.<\/p>\n

The chips that Nvidia specializes in, known as \u201cdiscrete\u201d GPUs, specialize in so-called parallel computing. This is a type of computing in which multiple processes are carried out simultaneously. By contrast, CPUs carry out programs serially, or sequentially. The type of computing GPUs handle is thus more efficient\u00a0and more valuable\u00a0than CPUs.<\/p>\n

Programmers have learned that Nvidia\u2019s GPUs are much better suited for programming AI software.<\/p>\n

Bloomberg News has called Nvidia\u2019s chips the \u201cworkhorse for training AI models,\u201d and PNC Financial Services Group analyst Amanda Agati described Nvidia\u2019s lead in the category last fall, based on its valuation, as a \u201cquasi monopoly.\u201d<\/p>\n

So Nvidia owes some of its success to having pioneered the technology that AI applications now depend upon.<\/p>\n

Today, virtually every major tech company, including Amazon, Google, Meta, Microsoft and Oracle, has made use of Nvidia chips.<\/p>\n

On Thursday, Nvidia reported earnings and revenues that significantly surpassed market expectations, helping lift the company\u2019s overall value past $2 trillion, trailing only Microsoft and Apple among the largest U.S. firms.<\/p>\n

\u201cAccelerated computing and generative AI have hit the tipping point,\u201d Nvidia CEO and co-founder Jensen Huang said in the earnings release. \u201cDemand is surging worldwide across companies, industries and nations.\u201d<\/p>\n

About $1.7 trillion of the market capitalization growth has come in the past 16 months alone, according to Goldman Sachs. Huang acknowledged in an interview with CNBC last year that a combination of luck and skill has led to the company\u2019s success.<\/p>\n

\u201cWe just believed that someday something new would happen, and the rest of it requires some serendipity,\u201d Huang said. \u201cIt wasn\u2019t foresight. The foresight was accelerated computing.\u201d<\/p>\n

For Moody\u2019s Senior Vice President Raj Joshi, Nvidia represents the \u201cdominant\u201d infrastructure player behind the current rise of the AI sector.<\/p>\n

While other chip designers are working to catch up to Nvidia, the company\u2019s three decades\u2019 worth of GPU specialization \u2014 compared with a competitor like Intel, which has historically specialized in CPUs \u2014 represents a massive advantage, he said. <\/p>\n

\u201cThis emerging field [AI] is better supported by GPUs,\u201d Joshi said in an interview with NBC News, adding: \u201cNvidia is providing the foundation for it in most cases.\u201d<\/p>\n

Nvidia also offers solutions for other sectors, like health care, that are not specifically tech-oriented, Joshi said.<\/p>\n

\u201cThey have a big lead in these markets,\u201d he said.<\/p>\n

Nvidia\u2019s specialization means it is able to charge a premium for its products. In fact, its chips, which are manufactured in Taiwan, are so unique that companies looking to build AI capabilities are complaining that there is a shortage of them.<\/p>\n

While the Biden administration\u2019s 2022 CHIPS and Science Act is designed to spur development of GPUs \u2014 and do so on U.S. shores \u2014 there is already concern about keeping up with market forces.<\/p>\n

\u201cThe\u00a0volume of chips that <\/strong>[AI companies] <\/strong>project they need is mind-boggling,\u201d U.S. Commerce Secretary Gina Raimondo said this week. She suggested even more federal subsidies would be needed if the U.S. hoped to be a meaningful player in chip manufacturing.<\/p>\n

\u201cI suspect there will have to be \u2014 whether you call it \u2018CHIPS Two\u2019 or something else \u2014 continued investment if we want to lead the world,\u201d Raimondo said during a virtual appearance at an Intel event. \u201cWe fell pretty far. We took our eye off the ball.\u201d<\/p>\n

In the meantime, investor interest in Nvidia remains frenzied. While some have speculated that its success might be a bubble, most Wall Street analysts say its financial statements have been proof that its product is viable.<\/p>\n

\u201cThe health of their core data center business is genuinely stunning,\u201d Goldman Sachs\u2019 Tony Pasquariello wrote in a note to clients Friday.<\/p>\n

Because it is now so much more valuable, Nvidia\u2019s financial results carry greater weight for the overall stock market, namely the S&P 500 index. According to Agati, who is chief investment officer and managing executive for investments at PNC, 60% of the earnings growth among all S&P 500 companies for the most recent quarter came from Nvidia alone.<\/p>\n

In other words, for the moment, as Nvidia goes, so goes the market, which could be a financial boon for consumers who hold investments in the stock market \u2014 whether individually, or through their retirement accounts.<\/p>\n

\u201c[Nvidia] has become critical to the market\u2019s path forward,\u201d Agati said in an email to NBC News, adding: \u201cIn the saying \u2018data is the new oil,\u2019 Nvidia continues to prove it is in a league of its own.\u201d<\/p>\n<\/p>\n

This post appeared first on NBC NEWS<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The business world is increasingly banking on artificial intelligence to be the next big thing, and has found itself turning to one maker of computer chips in particular \u2014 Nvidia \u2014 to power the revolution. Since 1993, the Santa Clara, California-based company has been designing programmable chips that help run an array of consumer-facing applications. […]<\/p>\n","protected":false},"author":0,"featured_media":1446,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1445","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1445","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=1445"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1445\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/1446"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=1445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=1445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=1445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}