Nvidia CEO Jensen Huang Reveals His Competition Strategy


Share post:

The first question Nvidia CEO Jensen Huang had to answer at the AI chipmaker’s annual shareholder meeting on Wednesday was how Nvidia handles rising competition.

Though Nvidia indisputably leads the AI chip market, with more than 80% of market share, competition has intensified. Established tech giants like Intel and AMD and rising startups like Etched, Cerebras, and D-Matrix are all vying for room in a highly lucrative space worth billions.

About 40% of Nvidia’s revenue is believed to come from just four companies: Microsoft, Meta, Amazon, and Alphabet. All of those companies have the means to fully develop AI chips on their own one day.

Related: Nvidia Long-Term Employees ‘Semi-Retired’ Multimillionaires

So Nvidia’s current customers could one day be its biggest competitors.

Huang addressed the threat of competition without calling out any rival in particular on Wednesday. In response to a shareholder question, he said Nvidia’s strategy was to make AI chips that have the “lowest total cost of ownership.”

Those five words don’t necessarily mean that Nvidia’s chips, which cost upwards of $30,000 apiece, are the cheapest on the market.

Instead, Nvidia’s chips could present a “lowest total cost” overall when potential customers consider performance, the cost of running the chips, and their wider reach.

“The NVIDIA platform is broadly available through every major cloud provider and computer maker, creating a large and attractive install base for developers and customers, which makes our platform more valuable to our customers,” Huang said, per CNBC.

Nvidia CEO Jensen Huang. (Photo by SAM YEH/AFP via Getty Images)

Nvidia’s chips have been around for 30 years, but until recently, they were used as graphics cards.

Huang believed that the chips could do more. In 2016, he asked his team to use the chips to build an AI server, which ended up being as big as a briefcase and cost $129,000 to make. He then hand-delivered the server to OpenAI as a gift.

Tens of thousands of Nvidia’s chips now power OpenAI’s ChatGPT.

Huang emphasized at the meeting that Nvidia had a head start on AI chips because it started investing in the technology a decade ago, pouring billions of dollars into the effort and adding thousands of engineers to work on it.

That first-mover advantage has paid off. Nvidia is now one of the world’s most valuable companies, hitting a $3.338 trillion valuation last week.

Related: Amazon Joins Apple, Nvidia, Microsoft, Alphabet in $2T Club


Please enter your comment!
Please enter your name here

Related articles

Tesla’s robotaxi launch gets delayed, stock plummets

Tesla is delaying the launch of robotaxi by about two months to October as the design team...

3 Steps to Drive Organizational Culture Change and Diversity

Ways you can influence culture change and greater DEI.

How To Make Money In One Hour

Being able to make money in one hour can help pay the bills without sacrificing your precious...

Esquire Financial: Wider Sentiment Is Hurting Its Stock Performance

It generates 22% of total revenue from noninterest income sources by serving 85,000 merchants across 50...