Nvidia continues to be the world’s leading artificial intelligence chip maker, posting more than $6 billion in sales and $0.88 in profit share last year.
Nvidia beats The Wall Street analysts’ expectations when they reported a fourth quarter revenue of $6.05 billion last Wednesday. Following the report, the chip maker giant’s shares went up 14% to $236.7 on Thursday, jumped more than 60% since the turn of the year, and led several analysts to hold a positive rating or hike their target prices.
This surge in shares propelled the company to increase by an estimated $70 billion in market value, totaling $580 billion.
Second to Nvidia is Advanced Micro Devices (AMD), which also experienced a rise in earnings, but remains far from Nvidia with a market share of only 20%.
Harsh Kumar, a Piper Sandler analyst, believes these Nvidia and AMD are leading the “AI revolution” when it comes to hardware and processing. “These two companies are head and shoulders above everyone else,” he added.
Meanwhile, their rival Intel experienced a 9.5% drop in shares last January, with a market value that’s only a fifth of Nvidia’s and a market share of only 1%.
Nvidia started as a business providing chips that help improve the graphics of video games. Eventually, the company boomed when it participated in the cryptocurrency hype and its chips were used for mining.
Now that it has shifted its gears to developing chips for generative AI, this move gave it control of about 80% of the graphic processing unit (GPU) market, cementing itself as the seventh-largest publicly traded firm and the world’s largest chip supplier. Its huge success as the company powering OpenAI’s ChatGPT has caused it to lead by a huge margin against its competitors.
But despite its huge lead in the race, a number of AI startups have dared to challenge the chip giant by creating their own line of AI-powering chips. Rebellion, a South Korean startup, launched ATOM to rival global tech giants.
The chips, manufactured by Samsung, consume roughly 20% of the power of an Nvidia A100 chip when it comes to accomplishing specific tasks.
Rebellion has humbly admitted that catching up to the world’s leading chip makers will be a challenge, but researchers and analysts believe the company may still find success through government incentives as South Korea pushes for its AI chips to penetrate the global market.