3 questions to understand Nvidia’s dazzling success

© Unsplash/Resul Kaya/Lemon squeezer

In 2024, Nvidia reached a symbolic milestone: its market capitalization exceeded $3,000 billion (!!), propelling the company into the leading tech pack. Nvidia owes this success in large part to the explosion of artificial intelligence, an area where its graphics chips, GPUs, excel. But how did a company specializing in gaming manage to become a key player in AI ?

To understand this phenomenon, we must go back to the origins of Nvidia, explore its visionary strategy and its ecosystem. We invite you to understand everything about this company relatively little known to the general public, and which today shapes the “neurons” from ChatGPT, Gemini, and other Mistral AI.

Nvidia is an American technology company founded in 1993. It is primarily known for its graphics processing units (GPUs), electronic chips initially designed to speed up the display of images in video games. These GPUs feature a massively parallel architecture, which means they can perform a large number of calculations simultaneously.

This parallel computing capacity has proven to be a major asset for artificial intelligence. This is because AI algorithms, such as those used for image recognition or natural language processing, require enormous amounts of computation. Nvidia's chips, thanks to their architecture, are capable of considerably accelerating these calculations, which has made it possible to democratize AI and make it accessible to a greater number of companies , researchers and today the general public.

But Nvidia does not just manufacture processors that excel in parallel computing. The company has developed a complete ecosystem around its products, including software, development platforms and algorithm libraries optimized for artificial intelligence. This ecosystem allows developers to easily create and deploy AI applications, which has helped strengthen Nvidia's position in the market.

Beyond artificial intelligence, Nvidia is also present in other areas. In autonomous cars, in particular: Nvidia's chips are used to process sensor data and make decisions in real time. A key market where the firm is also a leader.

Jensen Huang, CEO of Nvidia, understood the enormous potential of AI in the early 2010s and unfolds an unstoppable strategy. Already renowned for their performance in video games, and already for more than a decade ahead of its competitor AMD, the firm's graphics cards participate massively in the training and execution of models complex AI from the start.

200% Deposit Bonus up to €3,000 180% First Deposit Bonus up to $20,000

But the firm did not stop there: it was able to form partnerships in strategic sectors, which guarantees it a particularly comfortable turnover. Thus, the foundry collaborates with names like Google, Siemens, but also Amazon (AWS), Microsoft (Azure) and Oracle. But also video game players like Electronic Arts, or big names in the automobile industry, like BMW, or Honda. In fact, the partnerships and collaborations are so vast that the firm recently came to the aid of Apple to help it design the Personas, these famous digital doubles of the Vision Pro owners.

In 2024, Nvidia's technological advance is enormous… and the firm continues to invest massively in research and development to design ever more optimized chips. Let's note one detail, and not the least: we described Nvidia as a “founder” in introduction, that is to say as a chip manufacturer. In reality, the firm has been entrusting this activity to the Taiwanese foundry TSMC for some time, which allows it to concentrate on development while benefiting each year from the most advanced engraving processes on the market. While achieving enormous savings.

The chip manufacturing activity itself is in fact particularly complex and expensive. Intel knows something about this: fighting these two battles simultaneously means risking falling decisively behind in engraving finesse. A metric sign of increased performance and reduced power consumption. By subcontracting, like many other companies today, manufacturing to the most advanced foundry on the planet, Nvidia can concentrate on the essentials. ;: the actual design of the chips.

As we can see, Nvidia has been able to take the AI ​​turn like no other company, after having succeeded in conquering the graphics chips market. While achieving other successes in the automobile industry, in data centers, and many other areas. Successes which give the company an enviable position for the era that is coming. But also which present some disadvantages.

For example, the recent takeover attempt of ARM, responsible for the technologies which are at the heart of smartphone chips, among others, was refused by the regulator, fearing that this would result in a market position that was far too dominant. Beyond that, the firm knows that it cannot rest on its achievements.

Other giants seemingly impossible to bring down have bitten the dust for lack of innovation or vision: IBM, Microsoft (before its meteoric rise in recent years), Apple (before Steve's return Jobs)… Especially as competition in the AI ​​market intensifies. Companies like Intel, AMD, Google and Tesla are developing their own AI chips. The future will tell if Nvidia will be able to remain number 1 – we can recognize, in 2024, that things are still going pretty well.

📍 To not miss any news from Presse-citron, follow us on Google News and WhatsApp.