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Nvidia revolutionizes AI. Its Blackwell chip drives exponential growth.
Nvidia shares soared 240% in 2023, while this year they advance 170%. Blackwell, the world’s largest GPU, combines two dies with an HBI interface. This innovation attracts giants like Alphabet and Microsoft, which are expanding their data centers for AI.
Unprecedented technical advance
According to Moor Insights & Strategy analyst Matt Kimball, “Technically, Blackwell is a beast.” With more than 208 billion transistors, it is two and a half times the number of its predecessor, Hopper. This exponential leap is due to its dual-GPU configuration on a single chip, improved connectivity, higher bandwidth memory (HBM3E), and the introduction of a decompression engine that speeds up data processing up to six times compared to Hopper.
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The GB200 NVL72 server, which combines 72 Blackwell GPUs with 36 Grace CPUs, delivers up to a 30x performance boost for LLM inference workloads, with 25x lower power usage. Dion Harris, director of accelerated data center, high-performance computing (HPC) and AI at Nvidia, highlights that the advance was possible thanks to innovation in die-level communication through HBI.
The booming AI market
Spending by US companies on AI generation has increased from $2.3 billion in 2023 to $13.8 billion in 2024, according to Menlo Ventures. This upward trend reflects the interest of sectors such as banking, retail, technology and hospitality in implementing advanced assistants and chatbots.
To meet this demand, Nvidia is not only innovating, but also charging high prices for its chips. Blackwell’s sales in the current quarter are estimated to be between $4 billion and $5 billion, according to KeyBanc analyst John Vinh. The company projects $187 billion in data center revenue next year, 80% of which will come from Blackwell.
Rivalry in the GPU industry
Nvidia dominates the market with an 85% share in training generative AI models, but faces growing competition. Companies like AMD and Amazon develop their own alternatives, such as Trainium2. Broadcom, for its part, has raised its market capitalization to more than $1 trillion thanks to the success of its AI chip business.
Comparison of microprocessor manufacturers, we see NVDA leading with its potential growth throughout this year. Source: Yahoo Finance
Despite these challenges, Nvidia maintains its strength in AI training and its strategic position in model inference. Although competition could affect its market share in inference, its leadership in training remains strong.
Supply chain issues
Blackwell has faced production problems. Its complex design caused delays, according to Nvidia’s Jensen Huang. However, production is already advancing at a good pace and demand will exceed supply.
Despite these challenges, Nvidia continues to grow rapidly. Its sales increased by 126% in 2023 and growth of 111% is projected in 2024 and 52% in 2025.
Future prospects
Nvidia has demonstrated an exceptional ability to push the boundaries of semiconductor technology, cementing its leadership position in the AI industry.
The demand for the Blackwell chip is just one example of the growing interest in high-performance, energy-efficient computing solutions.
With increasingly aggressive competitors and supply struggling to meet demand, Nvidia faces a crucial challenge. However, its track record of innovation and leadership position in the GPU market puts it in a prime position to capitalize on the AI boom in the coming years.
The Blackwell chip not only symbolizes the company’s ability to redefine industry standards, but also its ambition to lead the next generation of information technology.
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