Jensen Huangexecutive director of nvidiaLittle did he know that an idea that came up in a chain restaurant Denny’s 30 years ago it would become the center of the revolution of the artificial intelligence (IA), leading him to be on the verge of turning his company into one of the companies that is valued above a trillion dollars.
For Huang, who usually wears a leather jacket to his public appearances, this is the culmination of a dream that began at that food joint in San Jose, Californiawhen talking with two fellow engineers about how to improve computer graphics.
But 16 years ago Huang’s dream took another turn when he tried to make his project more conventional, seeking new clients after establishing himself as a leader in graphics processors that made video games sharper and less choppy.
Huang opened up the company’s graphics processing units to software developers for tweaking, allowing them to use their computing power for other purposes besides improving the look of the graphics.
The company director’s idea was to open up “a whole new field called computer science.” GPUs”, that is, graphic processing unit for its acronym in English. None of the analysts asked for more details at the time, according to the Wall Street Journal.
The developers realized that these Nvidia processors were extremely good at complex computations, which would later be used to power modern AI systems. They excel at doing many computations simultaneously, something for which traditional computing engines (central processing units) were less well suited.
However, the company’s first great success outside of the world of video games would come with the cryptocurrency miningwhere GPUs also proved competent.
This allowed Nvidia to overtake the chip giant Intel regarding the market value in 2020 due to the increase in the price that the cryptocurrencies that year, so its shares continued to rise to what was its previous record of nearly $330 per share at the end of 2021.
Notwithstanding, in 2022 as the crypto crash began, Nvidia shares crashed, before the wave of AI reignited investor enthusiasm in recent months.
For many analysts, the rise of AI holds much bigger and more lasting promise for Nvidia than cryptocurrencies.
The company has no competitor right now that can match it in its array of chips and software for the computing-intensive demands of the AI generation. For example, some experts estimate that the development of the first large, widely available generative AI system, ChatGPT -of the company Open AIthat Elon Musk helped found before retiring – required about 10,000 Nvidia GPUs.
“I bet that in 5 or 10 years the chances overall will be considerably higher than it is today because we will grow into this,” he told the Wall Street Journal Stacy Rasgon, chip industry analyst at Bernstein Research.
As the AI race intensifies between companies like Amazon, Microsoft and Google from AlphabetHuang described the ongoing computing transition as a iPhone moment”, referring to the rapid growth of smartphones after Apple released its signature phone in 2007.
“We are seeing incredible orders to reshape the world’s data centers,” Huang said on a call with analysts at Wall Street Journal.
Demand for Nvidia’s chips has been so high of late that its supply chain has struggled to keep up. Nvidia’s chief financial officer said Wednesday that the company had secured “substantially higher” chip supplies for the second half of the year.
nvidia announced a net profit of 2,043 million dollars (1,899 million euros) in the first quarter of its fiscal year, 26% more than in the same period of the previous year, driven by the development of the artificial intelligence (AI).
The technology company had a turnover of 7,192 million in the three months ended May 1, 13% less year-on-year, but its main business, that of data centers, remained strong and registered record revenues, as reported in a release.
The data center business accounted for more than half of the turnover, with 4,280 million dollars (14% more), and the company indicated its good prospects due to the transformation that the development of AI in the technology sector entails.
According to a side note, data centers are benefiting from the growing demand for AI generative and extensive language models using processor-based computing architectures Hopper and Ampere from Nvidia.
“The computing industry is going through two simultaneous transitions: that of accelerated computing and that of generative AI,” he said. Huang.
“When generative AI came along, it triggered an excellent application for this computing platform that has been in the pipeline for some time,” he added.
Nvidia designs but does not manufacture its own chips. The company early on adopted a business model that outsourced production to contract chipmakers, including Taiwan’s semiconductor maker, the world’s largest.
“I think you’re looking at the start of, call it a 10-year transition to basically recycle or reclaim the world’s data centers and build it out as accelerated computing,” Huang said.
The Wall Street Journal reported that AI has become a battleground in the US-China tech war. China’s main nuclear weapons research institute bought Nvidia chips, among others, despite their placement on a US export blacklist in 1997, the US media reported.
In 2022, the government of President Joe Biden imposed new licensing requirements for shipments of some of Nvidia’s most advanced chips to China, costing the company hundreds of millions of dollars in sales. Since then, Nvidia has started offering a new alternative graphics processing chip with specifications that allow it to be exported to China.