NVIDIA Faces Rising AI Chip Competition from AMD, Amazon, and Startups

Dec 09, 2024

NVIDIA (NVDA, Financial) is encountering increased competition in the AI chip market. Rivals like AMD (AMD), Amazon (AMZN), and startups such as SambaNova Systems and Groq are developing custom chips for AI tasks, focusing on affordability and reliability. Research firm Omdia projects a 49% growth in non-NVIDIA chip spending by data centers in 2024, suggesting a shift toward a more competitive landscape.

Meta (META) is utilizing AMD's MI300 chips for its AI model, while Amazon’s Trainium 2 chip has received positive feedback from potential users, including Apple. Amazon continues to invest heavily, allocating $75 billion this year on AI chip development. Despite the competition, NVIDIA maintains a strong market position, emphasizing its advantages in AI software and upcoming Blackwell chips.

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I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.

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