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With a market cap of $1.4 trillion, Nvidia reigns as the world’s largest chip company, and its profits skyrocketed in 2023. But Nvidia’s latest rollout for China, a chip set to launch in Q2 2024 that complies with US export regulations, has major Chinese tech companies looking elsewhere.
IT Brew caught up with Neil Sahota—an AI advisor for the United Nations and author of Own the AI Revolution—to chat about chips, China, and the shifting market.
If it’s a slower chip, why release it? “It’s money and market share. Nvidia has 90% of the Chinese AI chip market. That’s a $7 billion market…we don’t want to give up, and if they don’t have an offering, then other companies will jump in and steal the market share. So Nvidia is in a tight spot to try to comply with regulations set forth by the US government…they don’t want to give up a lucrative market.”
Sahota on the speed and power of Nvidia’s new chip: “It’s more powerful than what’s in most of the Chinese market for the moment…I liken it to, everyone’s trying to race their cars, and rather than get the Ferrari engine, you’re really getting the Toyota Corolla.”
“I don’t want to say there’s no value in these chips. There are things we can look at, like cancer research. You can do some of that number crunching faster. So there’s benefit here. It’s just that, again, do you want to go 60 miles an hour when you can go 100 miles an hour? That’s the real sticking point for a lot of people.”
What about competitors? Are we going to see smaller companies pumping out chips? “Yes, and there’s some of that starting to happen. There’s a lot of focus on what’s called neuromorphic chips. Imagine that the AI actually lives inside the chip in the hardware. You don’t actually need an internet connection to use the AI system. So that’s become the next frontier.”