Nvidia is having a strong year, both in the first half and particularly this week. Amid the new surge of interest in generative AI, Nvidia has become one of the hottest stocks, with a soaring 185% increase in its share price this year, pushing the company's market value over the $1 trillion threshold and placing it far ahead in the hardware race for generative AI and large model research and development.
The chipmaker's presence is increasingly evident in the world of generative AI startups. Just this Thursday, US AI chatbot startup Inflection AI announced it had raised $1.3 billion in new financing, increasing its valuation to about $4 billion, and US AI video startup Runway announced it completed a new round of financing worth $141 million, bumping its valuation to around $1.5 billion. Nvidia has invested in both companies.
According to market research firm TrendForce, Nvidia is expected to replace Qualcomm as the world's largest chip design company in Q2 2023, thanks to revenue growth stimulated by AI-related chip deployment.
Nvidia's strategy is becoming increasingly clear: take on as much business in the AI chip market as possible while heavily investing in generative AI. This approach seems to be paying off.
Nvidia Rapidly Expands AI Investment Map with Generative AI Unicorns
Nvidia's recent investments in the two generative AI unicorns, Inflection AI, and Runway, have solidified its AI investment landscape. Inflection AI, a large language model startup that develops ChatGPT-like products, and Runway, an AI video editing software startup that allows users to easily create short videos with just a text input, have both garnered investments from notable tech giants.
In addition to Nvidia, Inflection AI's new round of financing included funds from Reid Hoffman, co-founder of LinkedIn, Bill Gates, co-founder of Microsoft, and Eric Schmidt, former CEO of Google. Runway's latest financing round included tech giants such as Google and Salesforce, bringing its total financing to approximately $237 million.
Earlier in June, Cohere, a Canadian AI startup developing ChatGPT-like chatbots, announced it had completed a $270 million Series C financing round. This round of funding saw participation from Nvidia, Oracle, Salesforce, and others.
It's worth mentioning that Inflection AI was co-founded by Mustafa Suleyman, a co-founder of DeepMind, in 2022, and following the launch of their Pi chatbot, they received a high level of interest and subsequent significant funding, with Nvidia being a new investor in this round. Now, this unicorn company has surpassed Cohere to become the third-largest generative AI unicorn globally, only behind OpenAI and Anthropic.
Inflection AI recently launched its first proprietary language model, Inflection-1, and claimed that the model, trained on a large dataset using thousands of Nvidia H100s, matches the performance of GPT-3.5, Chinchilla, and PaLM-540B.
Nvidia's GPUs Dominate Large Model Benchmark Tests - GPT-3 Trained in 11 Minutes
Inflection AI is collaborating with Nvidia to build one of the world's largest GPU clusters for training AI large models. Through partnerships with Nvidia and cloud service provider CoreWeave, the supercomputer will expand to include 22,000 H100s, far surpassing Meta's RSC supercomputing cluster's 16,000 A100s.
Nvidia has previously invested $100 million in CoreWeave, a company established in 2017 that claims to provide "80% cheaper computational power than traditional cloud providers." CoreWeave has also committed to a significant increase in its deployment of Nvidia's newest GPUs.
Further strengthening Nvidia's position, a recently published independent study by Stanford University's Center for Human-Compatible AI showed Nvidia's GPUs dominating in benchmark tests for large models. In the study, GPT-3, a 175-billion-parameter model, was trained in just 11 minutes using Nvidia's H100 GPUs.
Boosting TSMC's 5nm Production Capacity
Nvidia has not only invested heavily in generative AI startups but also in chip manufacturing giant TSMC. With a new investment worth $3 billion, Nvidia aims to secure additional production capacity for its next-generation H100 GPUs. TSMC will reportedly expand its 5nm production capacity by 15,000 wafers per month, thanks to the investment from Nvidia.
TSMC has been at full capacity with its 5nm process due to high demand from tech giants such as Apple, Qualcomm, and AMD. Nvidia's investment will give it priority access to TSMC's newly expanded 5nm production capacity, further solidifying its position as a leader in the AI chip market.
Despite the ongoing global chip shortage, Nvidia's strategic moves will ensure it has the capacity to meet the high demand for its next-generation GPUs, pivotal for AI advancements.
AI Spring: Nvidia Seizes the Opportunity
Nvidia is seizing the opportunities offered by the ongoing "AI spring". Having established a solid foundation with its powerful GPUs, the company is now branching out into new areas, investing in promising AI startups and securing its position in the AI chip market.
With the rapid advancements in the AI field, Nvidia is positioned to play an increasingly important role in AI development and deployment. Its ongoing efforts and recent achievements demonstrate a strong commitment to AI, which is reflected in its soaring stock prices.
As generative AI continues to gain traction, and with the ever-growing demand for powerful hardware to drive AI applications, Nvidia is clearly positioning itself at the forefront of this technological revolution.
