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Nvidia Sees Decline In Data center Business, CEO In Talks With Big Clients

Nvidia’s CEO, Jensen Huang is most likely worried of competition from traditional chipmakers and AMD is a name that tops the list. In today’s scenario, Nvidia is the major player in data center sphere but the scene can change, said Jon Peddie of Jon Peddie Research. The 90% plus share held by Nvidia can dilute to 80% as chipmaker AMD gets a huge push due to some big engagements and captures the remaining 20% share. The change of equation is likely to be seen by 2020 end, he said. Meanwhile, Nvidia’s CEO is in talks with more big clients.

On the other hand, Huang sees no threat from chip making projects of existing customers which comprise the likes of Google, Amazon, Facebook and Tesla. They are all buyers of Nvidia’s graphics cards which are highly powerful and any chips that turn out from the chip-making projects of big techs are unlikely to be a match for them.

Google entered the chip making scene for powering AI in 2016; however, it is yet to sell the product to varied companies in the field. Its chips which are on offer through its wide product range do not possess the same power as TPU chips required to train Google Cloud’s AI models.  Likewise Amazon-made AI chips go only towards its data centers delivering assistance to third party developers.

The recent artificial intelligence hype had pushed Nvidia’s stock ten times plus in a period of three years or less. But this rise came to a halt with the sudden decline in cryptocurrency mining demand; nevertheless Nvidia does not stop speaking about AI’s big potential in the coming future. Gaming continues to be the cash cow for the company.

Nvidia shares increased on Thursday with a better than expected quarterly results release. However, its data center business has witnessed a drop of nearly 14% from the earlier year.

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