Nvidia is Forming a New Business Unit to Make Custom Chips (reuters.com) 13
An anonymous reader shared this report from Reuters:
Nvidia is building a new business unit focused on designing bespoke chips for cloud computing firms and others, including advanced AI processors, nine sources familiar with its plans told Reuters. The dominant global designer and supplier of AI chips aims to capture a portion of an exploding market for custom AI chips and shield itself from the growing number of companies pursuing alternatives to its products.
The Santa Clara, California-based company controls about 80% of high-end AI chip market, a position that has sent its stock market value up 40% so far this year to $1.73 trillion after it more than tripled in 2023. Nvidia's customers, which include ChatGPT creator OpenAI, Microsoft, Alphabet, and Meta Platforms, have raced to snap up the dwindling supply of its chips to compete in the fast-emerging generative AI sector. Its H100 and A100 chips serve as a generalized, all-purpose AI processor for many of those major customers. But the tech companies have started to develop their own internal chips for specific needs. Doing so helps reduce energy consumption, and potentially can shrink the cost and time to design.
Nvidia is now attempting to play a role in helping these companies develop custom AI chips that have flowed to rival firms such as Broadcom and Marvell Technology, said the sources, who declined to be identified because they were not authorized to speak publicly...
Nvidia moving into this territory has the potential to eat into Broadcom and Marvell sales.
The Santa Clara, California-based company controls about 80% of high-end AI chip market, a position that has sent its stock market value up 40% so far this year to $1.73 trillion after it more than tripled in 2023. Nvidia's customers, which include ChatGPT creator OpenAI, Microsoft, Alphabet, and Meta Platforms, have raced to snap up the dwindling supply of its chips to compete in the fast-emerging generative AI sector. Its H100 and A100 chips serve as a generalized, all-purpose AI processor for many of those major customers. But the tech companies have started to develop their own internal chips for specific needs. Doing so helps reduce energy consumption, and potentially can shrink the cost and time to design.
Nvidia is now attempting to play a role in helping these companies develop custom AI chips that have flowed to rival firms such as Broadcom and Marvell Technology, said the sources, who declined to be identified because they were not authorized to speak publicly...
Nvidia moving into this territory has the potential to eat into Broadcom and Marvell sales.
Export Restrictions? (Score:2)
I wonder to what extent this is an end-run around export restrictions. It's much easier to regulate the export of a fixed product line than of custom chips where there are different products for every customer. And could Nvidia design products that are easy for the customer to aggregate together to produce a high-performance device, i.e., make it so that multiple small, exportable chips are as good a single large chip whose export is banned? That kind of thing would quickly be noticed in a public product
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Re:Export Restrictions? (Score:5, Interesting)
I don't think so. Nvidia is not that good at chip design, see, for example, the bad yield they often get initially. (Same, incidentally, applies to Intel these days. They essentially brute-force chip design and that is why they deliver significantly less bang for the buck and can often not deliver in relevant volume at all.) I expect that China has people by now that can do it just as well, even if they require more time and larger teams. That would be bad for profit, but for access it makes not a lot of difference. The other thing that gets overlooked all the time is that software is, on average, pretty bad these days and there often is a lot of room for optimization.
I think this whole expert restriction game is purely political virtue signalling that has, as usual, the opposite effect of what is claimed to be intended. Overall, it is a good thing because it makes everybody aware of brittle supply chains and do something about them and that makes everybody more resilient.
Re:Export Restrictions? (Score:4, Insightful)
I don't think so. Nvidia is not that good at chip design, see, for example, the bad yield they often get initially.
Nvidia is a fabless company, which means that TSMC is largely responsible for manufacturing yields. Or are you suggesting that Nvidia layouts are somehow depressing yields? If so, that's also mostly on TSMC, who has processes and teams dedicated to this for each customer.
They essentially brute-force chip design and that is why they deliver significantly less bang for the buck and can often not deliver in relevant volume at all.)
This makes absolutely no sense. If Nvidia's designs are straightforward designs, why aren't there any competitors doing the same? Are you implying that all other competitors are stupid?
And if the Nvidia products don't deliver value, why are they in such demand? Are you suggesting that the world's customers are stupid?
And if Nvidia and TSMC aren't able to deliver "relevant" volume, where did all of Nvidia's sales come from? $15-20 billion of data center revenue per quarter seems slightly relevant to me.
The other thing that gets overlooked all the time is that software is, on average, pretty bad these days and there often is a lot of room for optimization.
"Bad" is a subjective term. Certainly software has room for innovation, but that's not necessarily the fans as "bad." Of course, it should be mentioned that software is arguably one of the key reasons driving the demand for Nvidia GPUs.
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I don't think so. Nvidia is not that good at chip design, see, for example, the bad yield they often get initially.
Nvidia is a fabless company, which means that TSMC is largely responsible for manufacturing yields.
Not at all. TMCS gives the customer what their process can and cannot do and how reliable these things are. TMSC is only responsible for yield if these figures are not accurate. Depending on how redundant the design is, you can get _any_ dependable process up to 100% yield. In practice it is a difficult trade-off that Nvidia has not mastered.
Expected (Score:3)
A fool and their money part easily, and to a large extent that is due to the smarter people who create the infrastructure for that. When a lot of "investors" want to "invest" in "AI chips", whatever that is, the opportunity to spend this money will not wait long to avail itself. And what better way than "bespoke chip development".
On the upside, that may make my life easier, as us poor particle physics researchers are always looking for ways to develop custom hardware on shoestring budgets (caveats to what that means apply), so the more is on offer, the better.
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The absurd valuations due to the "AI" are a bubble. It ain't gonna last forever, as you also observe.
Re: Expected (Score:3)
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Of course I know, I still have a bit of free money left over from the first dot-com craze :)