Nvidia Says Its Latest AI Chips Will Be Affordable

Published by Elijah Ugoh on Mar 27, 2024

Fact-checked by Kate Richards • Fact-checked by Kate Richards

Nvidia’s next-gen AI chips will be affordably priced to capture a wider customer base, Nvidia’s CEO Jensen Huang said in a speech he delivered at the “AI Woodstock” conference last Tuesday.

Nvidia is one of the leading providers of AI chips, which are used in data centers around the world today. Huang revealed at the conference last Tuesday that there’s about $1 trillion of the tech installed in data centers globally, reported the Wall Street Journal.

Nvidia’s new set of chips is codenamed Blackwell and will be priced to capture a large portion of new spending in data centers, according to Huang. This move comes amid soaring demand for its AI chips, with the previous generation, called Hopper chips, experiencing supply shortages due to high demand.

Huang said in an interview on CNBC last Tuesday that the new chips would cost between $30,000 and $40,000, which is less than what analysts had expected. The company disclosed that its chips are mostly supplied to major cloud-computing companies, which accounted for over $9.2 billion of sales in its latest fiscal year.

Nvidia makes various types of equipment and software for data centers, ranging from GPUs to networking chips and central processing units. According to the Wall Street Journal, Huang told reporters at the conference that global spending on these pieces of equipment reached around $250 billion last year, growing about 20% a year.

“Our percentage of $250 billion will likely be higher than in the past,” Huang said. As the company continues to expand its offerings to data centers, particularly by making its next-generation AI chips more affordable, it is expected that it will make competition tougher for rivals like Advanced Micro Devices (AMD) and Arm Holdings.

“Every generation our market is growing, and we want to make the entire market afford a Blackwell,” Huang added. The Wall Street Journal also reported that the company’s market value surpassed $2 trillion in February, making it the U.S.’s third-largest listed company after Microsoft and Apple.

It noted that as Nvidia is making more waves in the AI market, its success has lifted some of its partners, such as the server maker Super Micro Computer. Super Micro shares have risen more than three times this year already.