Nvidia is continuing to steamroll top competitors like Intel and Advanced Micro Devices (AMD), taking advantage of AI hype to eat into their data-center businesses.
In its latest quarterly report, Nvidia reported sales had more than tripled to $18.1 billion, while net income rose from $680 million to $9.2 billion. A recent analysis by Taipei-based analyst Dan Nystedt found Nvidia has surged from fourth to first place in chip-manufacturing revenue, beating out competitors TSMC, Intel, and Samsung Semi, reported Tom’s Hardware.
Meanwhile, both Intel and AMD have recently reported troubles in the data-center market according to the Wall Street Journal.
AMD, which reported a 64% jump in data center sales last year, is now down 6% year over year for the last two quarters. Intel’s revenue has been shrinking for a few years, and its future is tied to the success of its Foundry pivot, which will see it manufacture chips (including AI ones) for other companies.
Challenges to Nvidia’s dominance are in the works from both firms, however. AMD will begin shipping its newly launched MI300 line of AI accelerator chips, which CEO Lisa Su projects will be the fastest AMD product to hit $1 billion in sales in company history, over the next few months. Intel CEO Pat Gelsinger has said AI will eventually be baked into “every product we build.” One of its biggest short-term bets is its Meteor Lake (also known as Core Ultra) line of AI CPUs, which include AI inferencing engines that Intel hopes to sell 100 million of by 2025.
Nvidia has recently attracted attention from regulators in China, the European Union, and France, Reuters reported. The company acknowledged in a filing that French authorities are looking into the company’s “business and competition in the graphics card and cloud service market,” while Chinese and EU regulators had sought information on their efforts to allocate supply.
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In the past year, Chinese companies have managed to stockpile large numbers of Nvidia AI processors, despite US restrictions intended to prevent them from doing so. The US Commerce Department rolled out new regulations in October intended to close loopholes in the rules, which would reportedly affect up to $5 billion in Nvidia orders in 2024.
Commerce Secretary Gina Raimondo issued some pointed remarks at the Reagan National Defense Forum in California in early December that PC Gamer reported seemed directed at Nvidia: “We cannot let China get these chips, period...If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day.”
While the company has acknowledged it will take a big hit to revenue from China, Nvidia CEO Jensen Huang has said the company does not intend to stop selling chips to Chinese firms.
“Our plan now is to continue to work with the US government to come up with a new set of products to comply with the new regulations,” Huang told reporters in December, according to the Journal. “The new regulations have additional limits. We have to come up with new products to comply with those regulations.”
Nvidia has designed three AI chips (the H20, L20, and L2) as regional replacements for the A800 and H800 AI lines, which it can no longer sell to China. Reuters reported that the H20 has been delayed due to manufacturing issues, and may not be ready until next year.
“We are working with the US government and, following the government’s clear rules, are working to offer compliant data-center solutions to customers worldwide,” Nvidia said in a statement that was provided to IT Brew by communications rep John Rizzo via email.