Communications of the ACM
NVIDIA at the Center of the Generative AI Ecosystem – For Now
Credit: Andrij Borys Associates, Shutterstock
Generative AI has attracted worldwide attention as a foundational technology with almost unlimited applications (see my previous column, "Generative AI as a New Innovation Platform," Communications, October 2023). Goldman Sachs estimates applications of this technology could raise global GNP by $7 trillion (7%) during the next decade.9 At the center of the new ecosystem is NVIDIA, whose high-end graphical processing units (GPUs) account for approximately 80% of the market for GPUs that power generative AI software.5,20
Established in 1993, NVIDIA's founders, led by Jen-Hsun (Jensen) Huang, initially saw a need for powerful specialized chips that could take over graphics processing from PC or workstation central processing units (CPUs), a market dominated by Intel. The company went public in 1999 and exceeded $1 billion in revenue in 2002. In its most recent quarter, NVIDIA reported sales of $13.5 billion (double the prior year) and net profits of $6.2 billion. It is now the world's most valuable semiconductor company, with a market cap surpassing $1 trillion, compared to $159 billion for AMD and $154 billion for Intel, its top competitors. This column explores several questions behind NVIDIA's extraordinary history.
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