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How Nvidia Emerged as The Leading Chip Manufacturer in The AI Craze



How Nvidia Emerged as The Leading Chip Manufacturer in The AI Craze

Thanks to positive expectations for the development of artificial intelligence (AI), Nvidia’s stock price has risen to all-time highs in recent weeks.

The chipmaker, which is the industry leader in producing the GPUs that are commonly used in artificial intelligence, closed above $2 trillion on Friday for the first time, placing it third in terms of market value behind Apple and Microsoft.

It’s unlikely that rivals will be able to close the gap anytime soon given the broad “moat” Nvidia has created through years of investment and the creation of its own popular software ecosystem, according to analysts.

According to Bernstein Research senior analyst Stacy Rasgon, “I think Nvidia is the team to lose, and they’re not showing any signs of losing it right now,” she told The Hill.

For many years, Nvidia has been creating GPUs. According to Tianqi Chen, an assistant professor in Carnegie Mellon’s Machine Learning Department, the GPU community started using the chips ten years ago after a discovery that changed the chips’ original purpose from video games.

One of the “godfathers” of artificial intelligence, computer scientist Geoffrey Hinton, discovered that GPUs were more effective at the kind of large-scale computation needed for machine learning, which sparked a “deep learning revolution,” according to Chen.

“The machine learning community started to embrace GPU computing,” Chen said. “As of today, right, almost all the AI models that run deep neural learning networks … a lot of them, even a majority, runs on GPU.”

After observing this trend, Nvidia started developing machine learning libraries for its CUDA software environment, according to Rasgon.

As Nvidia concentrated on advancing its AI capabilities, Advanced Micro Devices (AMD), its main rival in the GPU industry, faced financial difficulties.

“It’s only in recent years that AMD and even others have had the resources in place to start investing in data center and AI with GPUs,” Rasgon said. “But by then, Nvidia’s had like a 10-year lead.”

“A lot of it comes down to this: They had an early recognition that this was going to be important. They started dedicating resources to develop products, both hardware and software, to go toward this. They had competitors that were either not interested in doing this or not capable of doing it. And they never lost faith,” he added.

Nvidia has a substantial advantage over other GPU manufacturers thanks to its own software ecosystem.

“Nvidia took an early lead in AI GPU hardware, but more important, developed a proprietary software platform, Cuda, and these tools allow AI developers to build their models with Nvidia,” Morningstar equity strategist Brian Colello said in a recent report.

“We believe Nvidia not only has a hardware lead, but benefits from high customer switching costs around Cuda, making it unlikely for another GPU vendor to emerge as a leader in AI training.”

Rasgon pointed out that a developer would need to completely redo their code if they tried to switch to AMD or Intel components.

“It’s an enormous undertaking,” he said. “And time is money, right? I mean, you want to get to market with this stuff as quickly as possible. It’s much easier just if you’ve developed everything over the last 10 years on Nvidia parts to just keep using them.”

After the introduction of OpenAI’s widely used ChatGPT tool, which triggered intense rivalry among large tech companies to develop and distribute their own generative AI models, Nvidia has started to see a return on its GPU investment over the past year.

In May 2023, the chipmaker’s market value reached $1 trillion for the first time. Nvidia’s stock has increased by 77 percent since the year’s beginning, and the company has continued to rise in recent months.

Late last month, Nvidia first passed the $2 trillion threshold after releasing impressive fourth-quarter earnings that above forecasts. It broke Wall Street’s record for the biggest one-day gain when it added $277 billion in market value in a single day, briefly pushing it over $2 trillion.

Last week, Nvidia’s stock rose sharply once more, closing above $2 trillion for the first time following Dell’s release of fourth-quarter earnings that beat expectations. Reuters claims that Nvidia provides GPUs for Dell servers.

“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations,” Jensen Huang, the founder and CEO of Nvidia, said in the company’s latest earnings report.

Last year, the Biden administration’s limits on the sale of sophisticated processors in late 2022 caused a “significant” decline in the company’s data center revenue in China.

In order to get around the limits, Nvidia created two new chips with less features, but in October 2023 the administration also took action against these chips because to worries that American technology might be used to bolster the Chinese military.

At least for the time being, the Santa Clara, California-based company’s domination seems to be virtually unstoppable.

Nvidia’s competitors AMD and Intel don’t seem likely to overtake it, and while internal solutions from Google, Microsoft, Amazon, and Meta would be useful for some tasks, they probably wouldn’t have the same flexibility as GPUs, according to Rasgon.

Chen said that if businesses make significant investments in the software component, alternative chips might be able to capture a small portion of the market. He did, however, add that he didn’t think Nvidia would lose its position as the industry leader.

“In the long run, we expect tech titans to strive to find second-sources or in-house solutions to diversify away from Nvidia in AI, but most likely, these efforts will chip away at, but not supplant, Nvidia’s AI dominance,” Morningstar’s Colello added.


Biden, Kishida Secure Support from Amazon and Nvidia for $50 Million Joint AI Research Program



As the two countries seek to enhance cooperation around the rapidly advancing technology, President Joe Biden and Japanese Prime Minister Fumio Kishida have enlisted Inc. and Nvidia Corp. to fund a new joint artificial intelligence research program.

A senior US official briefed reporters prior to Wednesday’s official visit at the White House, stating that the $50 million project will be a collaborative effort between Tsukuba University outside of Tokyo and the University of Washington in Seattle. A separate collaborative AI research program between Carnegie Mellon University in Pittsburgh and Tokyo’s Keio University is also being planned by the two nations.

The push for greater research into artificial intelligence comes as the Biden administration is weighing a series of new regulations designed to minimize the risks of AI technology, which has developed as a key focus for tech companies. The White House announced late last month that federal agencies have until the end of the year to determine how they will assess, test, and monitor the impact of government use of AI technology.

In addition to the university-led projects, Microsoft Corp. announced on Tuesday that it would invest $2.9 billion to expand its cloud computing and artificial intelligence infrastructure in Japan. Brad Smith, the president of Microsoft, met with Kishida on Tuesday. The company released a statement announcing its intention to establish a new AI and robotics lab in Japan.

Kishida, the second-largest economy in Asia, urged American business executives to invest more in Japan’s developing technologies on Tuesday.

“Your investments will enable Japan’s economic growth — which will also be capital for more investments from Japan to the US,” Kishida said at a roundtable with business leaders in Washington.

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OnePlus and OPPO Collaborate with Google to Introduce Gemini Models for Enhanced Smartphone AI



As anticipated, original equipment manufacturers, or OEMs, are heavily integrating AI into their products. Google is working with OnePlus, OPPO, and other companies to integrate Gemini models into their smartphones. They intend to introduce the Gemini models on smartphones later this year, becoming the first OEMs to do so. Gemini models will go on sale later in 2024, as announced at the Google Cloud Next 24 event. Gemini models are designed to provide users with an enhanced artificial intelligence (AI) experience on their gadgets.

Customers in China can now create AI content on-the-go with devices like the OnePlus 12 and OPPO Find X7 thanks to OnePlus and OPPO’s Generative AI models.

The AI Eraser tool was recently made available to all OnePlus customers worldwide. This AI-powered tool lets users remove unwanted objects from their photos. For OnePlus and OPPO, AI Eraser is only the beginning.

In the future, the businesses hope to add more AI-powered features like creating original social media content and summarizing news stories and audio.

AndesGPT LLM from OnePlus and OPPO powers AI Eraser. Even though the Samsung Galaxy S24 and Google Pixel 8 series already have this feature, it is still encouraging to see OnePlus and OPPO taking the initiative to include AI capabilities in their products.

OnePlus and OPPO devices will be able to provide customers with a more comprehensive and sophisticated AI experience with the release of the Gemini models. It is important to remember that OnePlus and OPPO already power the Trinity Engine, which makes using phones incredibly smooth, and use AI and computational mathematics to enhance mobile photography.

By 2024, more original equipment manufacturers should have AI capabilities on their products. This is probably going to help Google because OEMs will use Gemini as the foundation upon which to build their features.

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Meta Explores AI-Enabled Search Bar on Instagram



In an attempt to expand the user base for its generative AI-powered products, Meta is moving forward. The business is experimenting with inserting Meta AI into the Instagram search bar for both chat with AI and content discovery, in addition to testing the chatbot Meta AI with users in nations like India on WhatsApp.

When you type a query into the search bar, Meta AI initiates a direct message (DM) exchange in which you can ask questions or respond to pre-programmed prompts. Aravind Srinivas, CEO of Perplexity AI, pointed out that the prompt screen’s design is similar to the startup’s search screen.

Plus, it might make it easier for you to find fresh Instagram content. As demonstrated in a user-posted video on Threads, you can search for Reels related to a particular topic by tapping on a prompt such as “Beautiful Maui sunset Reels.”

Additionally, TechCrunch spoke with a few users who had the ability to instruct Meta AI to look for recommendations for Reels.

By using generative AI to surface new content from networks like Instagram, Meta hopes to go beyond text generation.

With TechCrunch, Meta verified the results of its Instagram AI experiment. But the company didn’t say whether or not it uses generative AI technology for search.

A Meta representative told TechCrunch, “We’re testing a range of our generative AI-powered experiences publicly in a limited capacity. They are under development in varying phases.”

There are a ton of posts available discussing Instagram search quality. It is therefore not surprising that Meta would want to enhance search through the use of generative AI.

Furthermore, Instagram should be easier to find than TikTok, according to Meta. In order to display results from Reddit and TikTok, Google unveiled a new perspectives feature last year. Instagram is developing a feature called “Visibility off Instagram” that could allow posts to appear in search engine results, according to reverse engineer Alessandro Paluzzi, who made this discovery earlier this week on X.

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