Michael M. Santiago/Getty; Jenny Chang-Rodriguez/BI
Nvidia shares fell by up to five percent on Tuesday as competition in the market for AI chips became increasingly fierce.
Intel announced its Gaudi 3 AI accelerator chip, which is in direct competition with Nvidia’s best-selling AI chips.
Alphabet also introduced its self-developed chips to reduce costs associated with AI.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
Nvidia shares fell by up to five percent on Tuesday. The reason for this was announcements by competitors of major developments in the extremely lucrative market for AI chips. The stock has now recovered and reached Monday’s value.
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Intel announces new chip
Direct competition from Intel appears to be intensifying as the company announced on Tuesday its new AI chip called Gaudi 3.
The Gaudi 3 chip is intended to compete directly with Nvidia’s H100 AI chips, which have powered much of Nvidia’s sales and income growth over the past year.
According to Intel, the AI accelerator Gaudi 3 should offer 50 percent better inference performance than Nvidia’s H100 and be around 40 percent more power efficient than the H100. According to Intel, the new AI chip will be priced significantly lower than Nvidia’s AI chips.
While the Gaudi 3 offers increased processing power and power efficiency compared to the H100, it is unclear how the chip compares to Nvidia’s next-generation Blackwell chip, which was announced last month and is the successor to the highly successful H100 chip.
Intel announced that its new AI accelerator chip will be available to various companies such as Dell, HPE and Supermicro in the second quarter.
Google enters the chip market
Alphabet is also entering the chip business with the internal development of its Axion chip. The chip is intended to support Google’s big data analysis and reduce the company’s dependence on Nvidia.
While some analysts on Wall Street see Google’s Axion chip as a direct competitor to Nvidia, Google’s vice president said Amin Vahdat: “I see this as a basis for increasing the size of the pie.” The Axion chips are CPU-based and can handle a range of tasks related to AI workload.
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This is how Nvidia retains its customers
While Nvidia will face increased competition, Big Technology founder Alex Kantrowitz told CNBC on Tuesday that the company’s lead in AI-related software is what sets it apart from other chip companies becomes.
“The fact that developers rely on Nvidia’s software to train and run these AI models gives Nvidia an advantage that will be very difficult to catch up with. “Intel can tell us all day long how powerful its chips are, but it doesn’t have that software advantage that Nvidia has, and that means AI developers are locked into the Nvidia ecosystem,” Kantrowitz said.
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