Reports of Nvidia‘s huge financial success due to the uptake of its AI-specific chips has been widespread, but today it has been revealed just what the scale of that success has been. According to a new report, Nvidia has sold half a million AI cards in Q3 2023 alone.
Just yesterday we saw that TSMC has predicted Nvidia will be the world’s largest chips company, while last week we saw that the company’s AI revenue has grown 279% year-on-year. That Nvidia is seemingly shifting from being a GPU company to an AI company, then, isn’t news, but the sheer number of chips the company is selling certainly is.
For context, in recent years Nvidia has generally sold around 7-10 million graphics cards per quarter, so these AI chip numbers don’t seem all that huge. However, the vast majority of those GPU sales are for lower-end cards with small GPUs that can be produced in the thousands per wafer and sell at relatively small margins.
These AI chips, though, are huge with only hundreds produced per wafer but they sell with massive margins, costing around $10k to buy for the Ampere A100 and around $33k for the Hopper H100.
The report comes from research firm Omdia whose analysis also shows the breakdown of buyers of these chips, with Microsoft and Meta leading the charge with orders of around 150,000 chips each. Google, Amazon, and Oracle round out the top five buyers of these chips.
Interestingly, the results also show how Nvidia’s server revenue has and will change, and while it has risen significantly in recent years, it hasn’t exploded at the same rate overall as the AI chip sales, though of course the jumps are still very large, measuring tens of billions year-on-year.
All this also comes in the context of there being an export ban of these chips to China, which has fueled the wholesale conversion of thousands of RTX 4090 cards into new server-ready AI cards that are being sold at a high markup. When you can get a very powerful card like the 4090 marked up to $3k, it puts the price of the dedicated AI cards into perspective.
What does all this mean for graphics cards for gamers and workstation use? Well, if Nvidia was able we’re sure it would happily continue producing many of those too. The biggest question will be around production capacity, with the much-publicized production shortages of the last few years seemingly set to continue, despite several new chip fabs being built around the world. We wouldn’t expect availability to immediately dry up or prices to rise even further, but equally we’re unlikely to see a crash in prices in the market in time for the arrival of the likes of the RTX 5000 series, let alone the upcoming RTX 4000 Super series.
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