Nvidia's B200 AI Chip Unveiled: A Leap Towards Extending Market Dominance

At its annual developer conference, Nvidia unveiled the B200, a flagship AI chip 30 times faster than its predecessors, aiming to solidify its market dominance amid increasing competition.

Nvidia's Bold Move: Unveiling the B200 Chip and New Software Tools at GTC 2024

In a YouTube video post by CNET, Nvidia CEO Jensen Huang unveiled Nvidia's latest chip, which is 30 times faster at some tasks than its predecessor. The video was shown on a hockey arena stage in the heart of Silicon Valley.

He also described a new set of software tools designed to help developers sell AI models more easily to companies that use Nvidia technology, including most of the world's largest technology companies.

Nvidia's chip and software announcements at GTC 2024 will help determine whether the company can maintain its current 80% market share for AI chips.

"I hope you realize this is not a concert," Huang stated, donning his signature leather jacket, and joking that the day's keynote would be filled with complex math and science.

According to Reuters, it was a nod to how Nvidia, once mostly known among computer gaming enthusiasts, has earned recognition on par with tech behemoths like Microsoft and has become a Wall Street standout, with sales more than doubling in its most recent fiscal year to exceed $60 billion.

Nvidia's new flagship chip, the B200, combines two squares of silicon the size of the company's previous offering to form a single component.

While the B200 "Blackwell" chip is 30 times faster at tasks such as serving up answers from chatbots, Huang did not provide specific details about how well it performs when chewing through massive amounts of data to train those chatbots, which has driven the majority of Nvidia's soaring sales. He also provided no pricing information.

Overall, Huang's announcements failed to provide new fuel for Nvidia's rally, which saw its shares rise 240% in the last year, making it the third most valuable company in the United States, trailing only Microsoft and Apple.

Market Reactions and Strategic Shifts: Nvidia's New Era in AI and Computing Power

Nvidia stock fell 1.4% in extended trading, while Super Micro Computer, which makes AI-optimized servers using Nvidia chips, fell 4%. Advanced Micro Devices stock dipped nearly 3% during the keynote.

Tom Plumb, CEO and portfolio manager at Plumb Funds, whose most significant holdings include Nvidia, said the Blackwell chip was unsurprising.

"But it reinforces that this company is still at the cutting edge and the leader in all graphics processing. That doesn't mean the market is not going to be big enough for AMD and others to come in. But it shows that their lead is pretty insurmountable," said Plumb.

In a report for MSN, Nvidia stated that significant customers, including Amazon.com, Alphabet, Google, Microsoft, OpenAI, and Oracle, are expected to use the new chip in the cloud-computing services they sell and in their own AI offerings.

Nvidia is also shifting from selling individual chips to selling entire systems. Its most recent iteration houses 72 AI chips and 36 central processors. It has 600,000 parts in total and weighs 3,000 pounds (1,361 kilograms). Many analysts expect Nvidia's market share to fall by several percentage points by 2024 as new competitors' products enter the market and Nvidia's largest customers manufacture their chips.

"Rivals like AMD, Intel startups, and even Big Tech's own chip aspirations threaten to chip away at Nvidia's market share, particularly among cost-conscious enterprise customers," Insider Intelligence analyst Jason Bourne said.

Nvidia's Strategic Expansion: Bridging Hardware Excellence with Software Innovation

Though Nvidia is well-known for its hardware offerings, the company has also developed a significant portfolio of software products. The new software tools, known as microservices, improve system efficiency across a wide range of applications, making it easier for a company to incorporate an AI model into its operations, just as a good computer operating system can help apps function properly.

Nvidia expanded its focus beyond AI software, including software for simulating the physical world with 3-D models. Huang also announced partnerships with design software companies Ansys, Cadence, and Synopsys to work on cars, jets, and products. Following Huang's comments, shares of the three companies rose by about 3% in extended trading.

Huang also stated that Nvidia's software could stream three-dimensional worlds to Apple's new Vision Pro headset.

Nvidia also introduced a new line of chips designed for cars, including the ability to run chatbots inside the vehicle. The company expanded its already extensive relationships with Chinese automakers by announcing that electric vehicle manufacturers BYD (002594. SZ) are opening a new tab, and Xpeng will use its latest chips. Toward the end of his keynote speech, Huang announced a new series of chips for creating humanoid robots, inviting several of the robots built with the chips to join him on stage.

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