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The backstory: When OpenAI's chatbot, ChatGPT, took the world by storm in November 2022, it caused this huge AI frenzy. Everyone wanted in on the action, including big names like Google, Microsoft and others.
One company riding the AI wave right now is Nvidia. Since its creation in 1993, it’s become a chip juggernaut. It all started back in 1999 when Nvidia focused on creating GPUs (Graphics Processing Units) for video games. Well, it turns out Nvidia's GPUs are also like the holy grail for training deep-learning AI models.
Now, because of this AI boom, companies like Amazon, Google, Meta and Microsoft are scrambling to grab as many Nvidia chips as they can get their hands on. It's like a chip gold rush. And get this – even hospitals like Massachusetts General Hospital have been using Nvidia's chips to create AI systems that can predict the medical needs of patients.
More recently: Last week, Nvidia announced its second-quarter revenue would skyrocket by more than 50% above what analysts had estimated.
Then, head honcho CEO Jensen Huang spilled the tea that they're ramping up production like crazy to meet all this surging demand. And the cherry on top? Nvidia's stock is soaring to an all-time high. It’s become the most valuable chip company in the world.
The development: Nvidia's Huang just rocked the stage on Monday in Taiwan with a big lineup of new AI goodies. We're talking everything from robotics design, turbocharged gaming experiences and ad wizardry to mind-melting networking tech. The star of the show was DGX GH200, an AI supercomputer champ that’s set to supercharge the next-gen successors to ChatGPT. Huang also demonstrated the power of generative AI, showing how it can take a few words of user input and create something entirely new, like music. “Everyone is a creator now,” he said. And briefly, on Tuesday, it hit the US$1 trillion market cap, joining some of the world’s most valuable companies overall.
With this recent AI boom, it makes sense that Nvidia is shifting gears. It's moving away from being all about computer graphics and diving into the AI industry. For example, the company’s teamed up with ads giant WPP to shake up the advertising world. Together, they're using AI and the metaverse to revolutionize advertising production, making it way more cost-effective. It’s also got a service called Nvidia ACE for Games which will use AI to make game characters more interesting and give them more personality. And to top it off, Nvidia has a trick up its sleeve with a revolutionary networking system called Spectrum X that will massively increase how fast data can move within data centers.
"There's no question we're in a new computing era," said Nvidia CEO Jensen Huang in a speech on Monday in Taiwan. "Every single computing era you could do different things that weren't possible before, and artificial intelligence certainly qualifies.”
"With all the enthusiasm around AI and the fact Nvidia delivered a huge beat for first-quarter results and second-quarter estimates, this gives some actual evidence AI is for real," said Daniel Morgan, senior portfolio manager at Synovus Trust in Atlanta, GA in the US.
“We’re seeing incredible orders to retool the world’s data centers,” said Nvidia CEO Jensen Huang to analysts on a conference call last week. “The budget of a data center will shift very strongly to accelerated computing.”
"We're really just seeing the tip of the iceberg. This really could be another inflection point in technological history, such as the internal combustion engine – or the internet," said Derren Nathan, head of equity analysis at Hargreaves Lansdown.