NVIDIA is a worldwide pioneer in designing and manufacturing the processing processors used in data centers, cloud computing, AI, and video games. Some of the largest businesses in the world, including Apple, Microsoft, Alibaba, and Amazon, rely on it for graphic processors (GPUs).
The chip-producing company established its relationship with crypto mining long back and has significantly enabled the crypto ecosystem to expand exponentially in recent years. This blog explains the tech giant’s share in the crypto industry, its contribution to crypto mining, and how it is transitioning towards AI.
NVIDIA’s Market Share in Crypto Industry
Graphics processing units (GPUs) are specialized computer hardware for mining cryptocurrencies. Utilizing these units, challenging mathematical puzzles are solved, verified, and uploaded to the blockchain record. The task requires a sizable amount of computational power, and GPUs are exceptionally well-adapted.
NVIDIA’s gaming GPUs were so massively used in crypto mining that they caught the attention of the US Securities and Exchanges Commission. Following the completion of the SEC’s probe on NVIDIA’s fiscal results (2018), it was highlighted that the company had “failed to disclose that crypto mining was a significant element of its material revenue growth from the sale of its GPUs designed and marketed for gaming.”
Following the probe, the SEC also claimed that NVIDIA had deceived investors by failing to make the necessary disclosures in fiscal 2018, leading them to believe that the results, which were significantly impacted by a volatile industry, may have been “indicative of future performance.” As a result, the company was consequently penalized $5.5 million.
Boom in NVIDIA’s stock
Back in 2017, during the mining boom, cryptocurrency miners heavily relied on powerful GPUs to perform complex calculations. NVIDIA captured a significant share of the crypto-mining market with its high-performance graphics cards.
NVIDIA’s involvement in the crypto industry and its adaptation to cater to mining demand have had implications for its stock market performance. The demand from miners led to supply shortages and inflated prices of gaming graphics cards, making NVIDIA’s stock price surge from $120 (early 2017) to over $250 by the end of the year. NVIDIA’s annual revenue for 2021 stood at $16.675B, highlighting a 52.73% increase from 2020.
For the three months of 2023 (ended April 30), NVIDIA’s revenue increased by 19% while its profit crossed over $2 Bn, highlighting an increase of 44% (Revenue was down 13% year over year, while decreased costs led to a 26% increase in net income.)
After-hours trading saw a nearly 25% increase in the share price of the semiconductor manufacturer after the first-quarter results were announced. This year alone, the stock has skyrocketed by 186% (Jan-May). NVIDIA stock traded at $401.11 and did join the $1 Tn market cap club for a while.
NVIDIA’s Transition to AI
The booming demand for AI applications across industries like healthcare, finance, autonomous vehicles, and robotics presents immense opportunities for AI chip manufacturers. NVIDIA being at the forefront of this transition has already grabbed the lion’s share in the space. According to New Street Research, the company accounts for 95% market share for graphic processors used in AI and ML. Developing robust chips that can process heavy data algorithms, NVIDIA has played a significant role in the recent success story in the industry of ChatGPT. NVIDIA A100, the $10K chip, is becoming one of the most crucial equipment in the AI industry.
Jensen Huang, the CEO & Co-Founder of the company, recently unveiled the chip. NVIDIA A100 is said to be the first GPU processor based on the NVIDIA Ampere architecture with 54 Bn transistors embedded. According to claims, the A100 Tensor Core GPU will accelerate AI, data analytics, and high-performance computing (HPC) to handle highly complicated processing challenges.
What makes NVIDIA A100 stand out from every other chip because it allows AI models like ChatGPT to analyze big chunks of data in no time, learn from it, and generate responses in real time. This is crucial for a chatbot since a smooth user experience depends on speed and accuracy. Additionally, Chat GPT can efficiently perform complicated natural language tasks, such as producing coherent and meaningful responses to user input, thanks to the A100’sA100’s Tensor Cores, which accelerate matrix operations. While introducing the processor, Huang quoted:
“NVIDIA A100 GPU is a 20x AI performance leap and an end-to-end machine learning accelerator — from data analytics to training and inference. For the first time, scale-up and scale-out workloads can be accelerated on one platform. NVIDIA A100 will simultaneously boost throughput and drive down the cost of data centers.”
Ultimately, these AI platforms could be used to create more advanced AI chatbots and related platforms to execute complex tasks. Thanks to A100’s high-powered capabilities that empower the actions of emerging AI products.
Conclusion
NVIDIA’s collaboration with technology partners like Microsoft has facilitated the clustering of thousands of NVIDIA GPUs to accelerate the training process of enterprise-grade generative AI models like ChatGPT. This partnership demonstrates NVIDIA’s commitment to fostering a collaborative ecosystem that fuels AI innovation.
On the other hand, NVIDIA’s adaptation to cater to the demand from crypto miners highlights its notable presence in the sector. Cryptocurrency miners have favored the company’s high-performance graphics cards for their efficiency in mining calculations. NVIDIA’s involvement in the crypto industry has also influenced its financial outlook and stock market performance. However, it’s essential to consider that various factors, including competition and market dynamics, can affect NVIDIA’s market share in the crypto industry.
Ultimately with NVIDIA’s chipsets and GPU technology at the forefront, the future of AI holds great promise. The ability to train AI models faster and handle increasingly complex tasks opens doors for advancements across various industries. As AI continues to evolve, NVIDIA’s contributions in providing robust hardware solutions and driving innovation are poised to shape the landscape of artificial intelligence in the future.
