Tech Giants Bet Big on Nvidia’s AI Chips Amid Soaring Demand

Nvidia has yet to announce its first-quarter earnings, but the buzz generated by their technology in the earnings calls of major tech giants is already setting high expectations.

by Faruk Imamovic
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Tech Giants Bet Big on Nvidia’s AI Chips Amid Soaring Demand
© Getty Images/Justin Sullivan

Nvidia has yet to announce its first-quarter earnings, but the buzz generated by their technology in the earnings calls of major tech giants is already setting high expectations. As major companies like Microsoft, Alphabet, Amazon, and Meta Platforms emphasize the critical roles of AI infrastructure and generative AI in their strategies, Nvidia's prowess in this arena, especially with its H100 GPU chip, is becoming increasingly apparent.

The AI Revolution and Nvidia’s Role

The H100 GPU by Nvidia, a high-ticket item priced at upwards of $40,000, is pivotal in powering sophisticated AI technologies like ChatGPT and other generative AI platforms. This chip's importance is underscored by the fact that it is the backbone for many AI applications that are reshaping how tech companies operate and innovate.

As Nvidia gears up for the launch of its next-generation AI chip, Blackwell, later this year, anticipation is building about its potential impact on the AI technology landscape.

Endorsements and Investments from Tech Titans

The most significant endorsement this quarter perhaps came from Tesla's CEO, Elon Musk, who detailed the deployment of Nvidia’s H100 GPUs in enhancing Tesla’s Full Self-Driving software.

According to Musk, Tesla has commissioned 35,000 H100 GPUs and expects to increase this number to about 85,000 by year's end. This expansion indicates a robust confidence in Nvidia’s products, further solidifying its market position.

On the broader tech front, AI spending is seeing a marked increase. Meta Platforms, for instance, has revised its capital expenditures for 2024, now estimating between $35 billion and $40 billion—a notable jump driven largely by its aggressive investment in AI infrastructure.

The company has dramatically scaled its commitment to Nvidia's technology, purchasing an additional 500,000 H100 GPUs, bringing its total to an impressive 1 million units. Similarly, Microsoft and Alphabet are pouring vast resources into expanding their technical infrastructures, with Microsoft aiming to amass 1.8 million GPUs by the end of 2024 and Alphabet doubling its first-quarter CAPEX to $12 billion, focusing largely on server investments and data centers.

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