Five things to know about AI chip maker Nvidia and why everyone is talking about it

Last week Nvidia posted its latest quarterly sale results, revealing that – powered by surging demand for the computer chips driving AI software such as ChatGPT – by the end of July it would be sitting at US$11 billion, 50% more than Wall Street’s estimates.

This led to a mammoth 24.37% stock jump overnight, to a capitalisation of almost US$940 billion.

It also sparked an interest in what some are calling a “little-known” company that is now sitting at almost US$1 trillion valuation and has been a giant in the tech and gaming spaces for 30 years.

If you’re not across Nvidia or why it is suddenly getting so much attention, here are five things you need to know.

Nvidia invented the graphics processing unit (GPU)

While Nvidia launched in 1993, it invented the graphics processing unit (GPU) in 1999. The founders, including CEO Jensen Huang, believed that the future of computing was in graphics because it could solve complex problems that ordinary computing systems couldn’t.

This made it particularly pertinent to video games, which posed a huge computing problem that needed to be solved, as well as a large customer base.

Twenty-five years later and all PCs contain a GPU made by Nvidia, AMD or Intel. And over the years Nvidia has developed graphics hardware for Xbox, Sony and Nintendo.

The latest Nvidia demand is thanks to AI

The rise of interest in artificial intelligence (AI) has resulted in a fresh surge of interest in Nvidia. And this is largely due to a well-timed product.

Just before ChatGPT launched in November 2022, Nvidia released its most powerful processor to date — H100 — which so happened to have a focus on generative AI.

Since then, there has been a scramble from tech companies to get their hands on the H100. Elon Musk is said to have even snapped up thousands of them for his recently-announced AI company, X.AI.

Even Nvidia itself is leaning in, calling itself a ‘world leader in Artificial Intelligence Computing’.

It’s worth noting that the price of the H100 is a whopping US$40,000, which has actually increased from US$35,000. It’s also been sold for more by some third-party sellers.

But this isn’t the first time that we’ve seen this.

Crypto shortage

Back in the throws of the pandemic, the entire tech industry was impacted by supply chain and chip shortage issues.

For gamers, this was most evident when Nvidia released its much-anticipated RTX 3080 card. It sold out immediately and became subject to straight-up price gouging.

GPU shortages and price increases were further impacted by a new wave of interest in cryptocurrency, or to be more specific, crypto mining.

While Nvidia’s 30-series GPUs were less efficient at mining than other tasks, they were still being sucked up to be used in mining farms all over the world as crypto, meme coins, and NFTs took off across the internet.

And it is not like the company was completely anti-blockchain — it sells hardware specifically for crypto mining.

Nvidia is actually everywhere

If it seems like Nvidia has been hiding away in the PC towers of nerds (including mine) for all these years, you’d be wrong.

Nvidia’s hardware is far-reaching, and well beyond the world of video games. In fact, its customers include the trillion-dollar companies it is nipping at the heels of, including Google and Microsoft.

Tesla, Amazon and Meta also make up some of the 35,000 companies that utilise its hardware.

Cars are a big focus

One central area of focus for Nvidia, particularly for its AI capabilities, is autonomous vehicles. Nvidia is already being used by a large number of car makers such as Mercedes-Benz, Tesla, Toyota and Volvo.

Nvidia has a range of ‘DRIVE’ products in its lineup, including those designed for modern intelligent vehicles. But its premier offering is the Hyperion, which is a production-ready platform for autonomous vehicles.

This includes an entire army of sensors for the vehicles as well as an autonomous driving software stack.

While autonomous vehicles are still largely banned, particularly in Australia, Nvidia investing in this now is a good indication of its continued focus on being at the forefront of future tech, which has underpinned the company for 30 years.