Nvidia revenue broke records thanks to artificial intelligence (AI) despite gamers turning away from expensive gaming GPUs when performance was not worth the price.
According to GearRice club, a detailed report calculates that Nvidia makes close to 1,000% per AI-specific H100 GPU, helping to raise the company’s value to join the trillion-dollar. Despite being a leader in the gaming graphics card market for almost three decades, Nvidia’s value has only begun to increase dramatically in recent years thanks to two main activities: cryptocurrency mining and artificial intelligence.
The first was the explosion of cryptocurrency mining, which wiped out all the gaming GPUs on the market, tripling their value and frustrating gamers. But artificial intelligence (AI) is really a gold mine for Nvidia. Like cryptocurrencies, AI needs chips with massive computing power. Fortunately, it’s not focused on gaming GPUs, but on GPUs designed specifically for AI, including the A100 and H100.
According to estimates from consulting firm Raymond James, the production cost of H100 GPUs is $3,320, but Nvidia sells them for $25,000 to $30,000 depending on the number of GPUs. That’s a profit of almost 1,000%.
companies Despite the high prices, large AI needs thousands of GPUs of this type to satisfy the needs of thousands of customers. Inflection AI company purchased 22,000 H100 GPUs to build their AI system a few weeks ago, while Microsoft also purchased tens of thousands of A100 GPUs (H100’s predecessor) to power ChatGPT’s computing power. The company also supplies 20,000 H100 GPUs to Amazon and another 16,000 H100 GPUs to Oracle. The rush of orders to Nvidia caused the company to delay deliveries until 2024 because it could not produce in time.
As a result, it’s no surprise that Nvidia’s stock has tripled in recent years, giving the company a market value of about $1.069 billion.
But not all is going well for Nvidia as its main market of gaming GPUs is currently going through its worst period with sales bottoming out. The community also criticized the company’s RTX 4060 series for its unconvincing performance. market But because Nvidia was able to give up the gaming GPU, it did not accept the discount.
Now, Nvidia is only eyeing AI, where the H100 GPU is bringing huge profits to them. And unlike cryptocurrencies, this is a future-stable market.