Nvidia to Launch Custom Chipmaking Unit for Cloud Computing
According to reports, Nvidia is set to launch a new division focused on designing custom-made chips for cloud computing companies and other key sectors, including advanced AI processors.
The move represents part of Nvidia’s strategy to capitalize on the rapidly growing custom AI chip market while securing its position against increasing competition.
With its headquarters located in Santa Clara, California, the company currently holds an estimated 80% share in the high-end AI chip market. This dominance has contributed significantly to a 40% increase in its market value this year, reaching $1.73 trillion, following a more than threefold growth in 2023.
Nvidia’s primary clients, which include major companies such as Microsoft, Alphabet, OpenAI, and Meta Platforms, are vying for Nvidia’s chips, which are in limited supply, as they venture into the ever-evolving generative AI domain.
For instance, according to reports, leading tech giants have been in discussions with Nvidia about producing specialized chips tailored to their specific needs. The chipmaker, which experienced rapid growth in 2023, continues to expand its focus to cover sectors such as telecom, automotive, and gaming, in addition to data center chips.
A report from 650 Group projects that the data center custom chip market could hit $10 billion this year and potentially double by 2025. Moreover, analysts from Needham estimate that the overall custom chip market was valued at around $30 billion in 2023, representing about 5% of the global annual chip sales.
Nvidia’s new initiative aims to tap into the soaring demand for custom-made chips, particularly in the AI domain, in response to the increasing needs of various industry players. The company’s move into this space underlines the ongoing transformation and technological advancements across different sectors, driving the need for more advanced and specialized chips.
