Nvidia has established itself as the current frontrunner in the AI chip arena. Its powerful graphics processing units (GPUs), like the H100, have become the industry standard for AI developers, particularly for large language models (LLMs) that fuel chatbots and other generative AI applications. This success has propelled Nvidia to record earnings, with its stock price skyrocketing in recent years.
Nvidia reported revenue of $22.1 billion in the fourth quarter of 2023, far exceeding Wall Street expectations, adding that it expected revenue for the current quarter to be $24 billion. In comparison, revenue for the same quarter was $6.1 billion in 2022. Net profit was $12.29 billion, compared with $1.41 billion a year earlier.
“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations,” Nvidia CEO Jensen Huang said.
The company’s data center division, which includes sales of GPUs for artificial intelligence applications, posted revenue of $18.4 billion, beating analysts’ expectations of $17.2 billion. It could have been much higher without current U.S. sanctions that have blocked the sale of specific Nvidia chips to China due to fears that they could be used for military applications.
Nvidia’s CFO Colette Kress warned that data center revenue out of China fell “significantly” in Q4 due to U.S. licensing requirements.
New “Intel Foundry” wants to challenge Nvidia’s dominance
While Intel has historically dominated the CPU market, it has lagged in the AI chip race. Intel Foundry, a new business unit, aims to become a significant player in chip manufacturing, especially for AI-specific chips. The announcement, made on the same day Nvidia posted last quarter’s results, shows Intel’s CEO Pat Gelsinger’s goal to become a strong player in AI.
“AI is profoundly transforming the world and how we think about technology and the silicon that powers it,” said Gelsinger. “This is creating an unprecedented opportunity for the world’s most innovative chip designers and for Intel Foundry, the world’s first systems foundry for the AI era. Together, we can create new markets and revolutionize how the world uses technology to improve people’s lives.”
Intel Foundry has design wins across foundry process generations, including Intel 18A, Intel 16, and Intel 3, along with significant customer volume on Intel Foundry ASAT capabilities, including advanced packaging. The company redoubled its commitment to achieving 100 percent renewable electricity worldwide, net-positive water, and zero waste to landfills by 2030.
Intel Foundry process roadmap. Source: Intel
During the announcement, the participants and speakers were U.S. Secretary of Commerce Gina Raimondo, Arm CEO Rene Haas, Microsoft CEO Satya Nadella, OpenAI CEO Sam Altman, and others.
Intel has expanded its process roadmap, targeting leadership in chip performance by 2025. The company also secured a major design win with Microsoft, which will manufacture chips on Intel’s 18A process, boosting its credibility.
“We are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organization and the entire industry,” Microsoft’s CEO Satya Nadella said. “To achieve this vision, we need a reliable supply of the most advanced, high-performance, and high-quality semiconductors. That’s why we are so excited to work with Intel Foundry, and why we have chosen a chip design that we plan to produce on Intel 18A process.”
A multifaceted landscape
While the Intel vs. Nvidia rivalry is captivating, it’s important to remember that the AI chip market is not a two-horse race. Other players like AMD, Samsung, and Amazon are also developing competitive solutions. Additionally, specialized AI accelerators are emerging for specific tasks, further diversifying the landscape.
The race for AI chip supremacy is not just about corporate profits; it has significant implications for the future of AI itself. Faster, more efficient chips will enable the development of even more powerful AI applications, from autonomous vehicles to personalized healthcare. Ultimately, the winner in this battle will shape the AI chip market and influence the trajectory of AI innovation itself.
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