Hyperscalers forge ahead with in-house semiconductor solutions amidst Nvidia dependency concerns – GlobalData

Meta, Microsoft, Google, and Amazon aim to reduce dependency on Nvidia. #pressrelease

May 20, 2024

1 Min Read

Hyperscalers such as Meta, Microsoft, Google, and Amazon are strategically shifting towards developing proprietary semiconductor technologies in response to the soaring demand for Nvidia's GPUs in the burgeoning generative AI (GenAI) market. This strategic move is aimed at reducing dependency on Nvidia while fostering innovation and facilitating global expansion. Within this dynamic landscape, significant investments in AI technologies and strategic partnerships underscore the intense competition within the GenAI space, says GlobalData, a leading data and analysis company.

Nvidia, which sells graphic processing unit (GPU) semiconductors particularly suited to AI-specific workloads, has emerged as one of the clear winners in the nascent GenAI market as demand for its GPUs explodes. However, providers of GenAI services such as big cloud computing companies have been impacted by the massive financial burden of acquiring the expensive chips.

GlobalData analysis notes that money continues to flow in the lucrative GenAI space as hyperscalers jockey for position. Leading GenAI companies are ramping up investment in strategic partnerships across the world to remain competitive. Microsoft, now vying for a global presence to offer AI services across Microsoft Azure's infrastructure, has recently invested $1.5 billion in new technology group G24, an Abu Dhabi (UAE) AI consortium. AWS is completing its final round of $4 billion in funding to partner Anthropic, striving to gain a foothold following Microsoft's mega OpenAI investment.

Read the full press release here.

GlobalData

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