Nvidia makes waves with new business unit and AI breakthrough, surpasses Amazon’s market value

Nvidia, already soaring high in the tech industry, has reached a significant milestone by surpassing Amazon in market value for the first time since 2002. This achievement underscores Nvidia’s growing influence and dominance in the market.

Building on this success, Nvidia has recently unveiled a groundbreaking development: its generative AI for PC, compatible with GeForce RTX 30 and 40 series. This innovation promises to revolutionize the gaming and creative industries, offering unparalleled realism and immersive experiences.

In addition, the company has made a strategic move and it’s set to establish a new business unit to capitalize on the demand for custom silicon solutions. Led by vice president Dina McKinney, a veteran with extensive experience in the industry, this division aims to cater to various sectors, including automotive, gaming consoles, data centers, and telecom, seeking tailored silicon solutions.

While the creation of this division has not been officially confirmed by Nvidia, industry sources have revealed its existence. Discussions with tech giants like Amazon, Meta, Microsoft, Google, and OpenAI suggest the company’s commitment to expanding its offerings beyond conventional products, according to Reuters.

Meanwhile, analysts predict broader implications for Nvidia, extending beyond data centers to consumer markets. With a legacy in the consumer market and a foothold in supplying application processors for consoles like the Nintendo Switch, Nvidia is well-positioned to capitalize on this opportunity.

While major cloud service providers continue to utilize Nvidia’s A100 and H100 processors for AI and HPC workloads, they are also developing custom processors to meet specific computing needs. This trend enables CSPs to optimize costs and tailor hardware capabilities and power consumption. Consequently, while Nvidia’s GPUs remain vital for many applications, a significant portion of workloads now runs on custom silicon, posing potential challenges for Nvidia’s market share. However, rather than resisting this shift, Nvidia aims to embrace it by joining the custom silicon trend.

Industry analysts speculate on broader implications, suggesting that the company’s interest may extend beyond data centers to consumer markets due to their massive scale. Jon Peddie Research emphasizes Nvidia’s legacy in the consumer market, enabling the company to leverage its brand and develop powerful processors for various applications. While the technological firm attempts in the smartphone and tablet markets were not as successful, its presence in supplying application processors for consoles like the Nintendo Switch demonstrates potential for expansion. The consumer market offers the company the opportunity to design chips for long-term clients, amortizing development costs over millions of units.

“Nvidia is keen on expanding its console footprint, aiming to reclaim its position with Microsoft and Sony,” notes Jon Peddie. “With AMD’s cost-performance advantage in APUs, Nvidia hopes to compete with Grace. Additionally, Nvidia’s compatibility with Arm architecture opens doors to partnerships with Microsoft, while Sony’s custom OS presents an opportunity for Nvidia’s advancement.”

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