What makes Nvidia’s chips so special during this AI boom?

On Tuesday (May 30), Nvidia became the first semiconductor company to (briefly) hit a $1 trillion valuation. Its stock has been rising for months, and particularly after it reported earnings last week that exceeded Wall Street’s expectations. Read more……

Though Intel and AMD are working on producing faster chips, they are still behind the curve, according to analysts. Intel had also started out with a general-purpose processor technology, unlike Nvidia’s specialized one for gamers.

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How long will the Nvidia boom last?

Since at least the early 2000s, developers have been turning to Nvidia’s chips for AI applications. Shih, the professor at Harvard Business School, suspects that a hype cycle is also driving Nvidia’s stock now.

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There has been so much interest in generative AI—to the point that the technology is being described as having an iPhone moment—that Nvidia doesn’t have to worry about demand for its microprocessors. But eventually, the increasing competition to produce AI chips will bring down Nvidia’s price advantage, said Dekate. Nvidia may be currently winning the AI boom, but the industry is developing so fast that its dominance can never be taken for granted.

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