It’s raining cash, no less than for those who’re promoting graphics playing cards. In keeping with latest business analysis, the marketplace for graphics processing models is ready to hit about $100 billion in 2024. It’s an enormous shift in a market phase that was already rising fairly shortly.
However don’t get too excited, avid gamers. We aren’t those shopping for. Nearly all of that progress is pushed by an explosion in AI infrastructure, in line with Jon Peddie Analysis in a brand new market report, which confirms that Nvidia is reaping many of the profit on this change.
That’s hardly stunning for those who’ve even been glancing on the information these days. Promoting AI {hardware} for knowledge facilities, simply a few years after promoting a number of the similar {hardware} for cryptocurrency technology, has pushed Nvidia to develop into essentially the most precious firm on the planet. (By market cap, anyway. There are different methods to measure company worth, however that’s an argument for larger brains than mine.)
For a little bit of broad context on this $100 billion quantity, the estimated worldwide income for smartphones in 2023 was about $500 billion in line with Statista, and automobile gross sales totaled about $2.1 trillion for the highest 20 producers.
Nvidia is unquestionably the go-to vendor for any firm that desires to quickly scale up versatile, AI-focused knowledge facilities, you probably have the scratch. Nvidia’s next-generation AI {hardware} is projected to value between $30,000 and $40,000 per unit on the prime tier. That’s the sort of “big iron” that makes an RTX 4090 look reasonably priced, and it’s partly why the headline of this text is in {dollars} slightly than concrete chips or playing cards.
However, in fact, Nvidia isn’t the one participant out there proper now, even when it’s completely dominating for the time being. Intel, AMD, Qualcomm, and Broadcom are all nipping at Nvidia’s heels, and even some shock gamers like Apple and Meta (Fb) get a point out within the quick type of Jon Peddie’s report.
It’s price declaring that promoting chips for AI knowledge facilities isn’t the one solution to make some scratch in GPUs. Naturally, you’ve received each discrete and built-in graphics for PCs, smartphones, and tablets, sport consoles, and much more specialised {hardware} going into vehicles, VR headsets, and wearables like smartwatches. Because the report says, “GPUs have become ubiquitous and can be found in almost every industrial, scientific, commercial, and consumer product made today.” Complete quantity for the AI portion of the market is definitely comparatively low, even when it’s driving the lion’s share of the income.
Lengthy story quick: Individuals are nonetheless going to play video games and stream video, even when they’re speaking to ChatGPT to assist stem the crushing tide of digital isolation whereas they do it. Somebody has to make and promote that {hardware}.
It’ll be attention-grabbing to see how the concentrate on high-margin business-to-business gross sales impacts Nvidia’s output in 2025, and the way the remainder of the market adapts to that. In any case, Nvidia can solely make so many chips, and it’s not going to be too involved with the $500 revenue on a top-of-the-line RTX 5090 Ti Tremendous-Duper Magnum MAX if it could possibly extra reliably make $10,000 promoting a chip to the following AI startup that’s splashing round in buckets of angel investor money. That would open up some area for the likes of AMD, Intel, and others to lastly try to promote extra GPUs to shoppers, particularly on the mid-tier and low-end.
However that is all navel-gazing. The one factor we will say for certain is that there’s going to be some huge cash made promoting GPUs within the close to future.
