Every standard products company (like NVIDIA) eventually gets lured by the prospect of gaining large volumes and high margins of a custom products business.
And every custom products business wishes they could get into standard products to cut their dependency on a small handful of customers and pursue larger volumes.
Given the above and the fact that NVIDIA did used to effectively build custom products (i.e. for game consoles and for some of its dedicated autonomous vehicle and media streamer projects) and the efforts by cloud vendors like Amazon and Microsoft to build their own Artificial Intelligence silicon it shouldn’t be a surprise to anyone that they’re pursuing this.
Or that they may eventually leave this market behind as well.
While using NVIDIA’s A100 and H100 processors for AI and high-performance computing (HPC) instances, major cloud service providers (CSPs) like Amazon Web Services, Google, and Microsoft are also advancing their custom processors to meet specific AI and general computing needs. This strategy enables them to cut costs as well as tailor capabilities and power consumption of their hardware to their particular needs. As a result, while NVIDIA’s AI and HPC GPUs remain indispensable for many applications, an increasing portion of workloads now run on custom-designed silicon, which means lost business opportunities for NVIDIA. This shift towards bespoke silicon solutions is widespread and the market is expanding quickly. Essentially, instead of fighting custom silicon trend, NVIDIA wants to join it.
Report: NVIDIA Forms Custom Chip Unit for Cloud Computing and More
Anton Shilov | Anandtech
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