Nvidia Is Aiming For Apple and Microsoft
You may not have purchased any Nvidia products or even heard of Nvidia before, but in today's world, your life will inevitably be linked with the company Nvidia. Nvidia's market capitalization once exceeded $2.3 trillion this year, second only to Microsoft and Apple. What exactly is Nvidia?
NVIDIA is a company that specialises in 3D image processing for video games. Their goal is to use high-performance chips to enhance the visual quality and smoothness of gameplay. In the early days, graphics technology on PCs was still relatively primitive, but NVIDIA saw the potential for significant advances.
Despite some initial skepticism about their business idea, NVIDIA persevered. In fact, Jen-Hsun Huang's mother even asked him a soul-searching question when she first heard about the company's focus on gaming graphics. Although someone may ask, "Can't you just get a job?"
It is undeniable that NVIDIA has made significant progress. In the first few years of its existence, NVIDIA developed a series of 3D acceleration cards, including the Riva128, which set NVIDIA apart from its competitors. In 1999, NVIDIA developed the GeForce256, which was the world's first true GPU, a processor dedicated to computing graphics and images, which can act as the "brain" of the graphics card.
In the gaming industry, NVIDIA's technology continues to evolve, resulting in increasingly stunning rendered images. As a result, NVIDIA's gaming revenue has also increased in line with the improved performance and reputation of its graphics cards.
Gaming remains a core segment of NVIDIA's four main businesses (gaming, data center, professional visualization, and automotive) throughout fiscal year 2022. In that year, NVIDIA generated $12.5 billion in revenue from gaming, accounting for 46% of its total revenue. NVIDIA has long held a market share of over 80% in the discrete graphics card market, which is driven by gamers, and maintains its top position with a significant advantage.
NVIDIA's success in the gaming industry is undeniable, but it alone is insufficient for the company to become the world's third-largest by market capitalization. The upcoming AI (Artificial Intelligence) wave, starting in 2023, is what will propel NVIDIA to new heights.
Currently, a significant 'AI war' is being waged, and NVIDIA is one of the primary 'arms suppliers' for this conflict. In the first half of 2023, the market saw the release of NVIDIA H100, touted as the 'strongest graphics card'. Despite its exorbitant price, the card remained in short supply. The scarcity of graphics cards was so severe that Musk lamented that obtaining GPUs was more difficult than obtaining drugs.
Regardless of the outcome of the 'AI war', NVIDIA is poised to emerge as the ultimate victor. The AI arms race requires significant computational power, which is where NVIDIA's graphics cards come in. As technology companies compete with each other, NVIDIA continues to excel.
In the 2024 fiscal year, NVIDIA's revenue increased by an impressive 126% compared to the previous year, reaching $60.9 billion. Additionally, its operating profit rose by 681% year-on-year to $32.972 billion. Among them, AI-related data centre business revenue was $47.5 billion, accounting for 78% of the company's total revenue.
Although NVIDIA does not primarily produce AI applications, it has become a giant in the field, shaping the entire AI development pattern.
Given that AI is increasingly becoming the driving force of our times, NVIDIA, while not as well-known as Microsoft and Apple currently, seems poised to join their ranks in the near future.
However, the field of AI is vast, and coupled with the high cost of NVIDIA's graphics cards, it is not only AMD and other chip startups that are challenging NVIDIA. Microsoft, Intel, Amazon, Google, Meta, Apple, and other major players are also developing their own AI chips to break NVIDIA's dominance.
It appears that Nvidia will remain elusive for the foreseeable future, as the saying goes, 'one man to hold the pass, ten thousand cannot open'.
