Meta, Microsoft, And Nvidia

Todd Moses
April 12, 2024

Following Microsoft, Meta debuts a new AI chip to decrease reliance on Nvidia.

Inputs that matter: Gary Marcus, an AI expert who spoke at the US Senate AI Oversight Subcommittee, reports Sequoia discovered that the AI industry spent $50 billion on Nvidia chips to train AI models last year but only generated $3 billion in revenue.

  • According to SDXCentral, Nvidia's revenue increased 224% in 2023 and is projected to grow double-digits in 2024.
  • CNBC reports, "Nvidia is valued at more than $2.2 trillion, powered partially by the tech industry's artificial intelligence boom and high demand for its computer chips."
  • The Motley Fool says, "Hans Mosesmann of Rosenblatt Securities recently placed a $1,400 price target on Nvidia stock -- implying nearly 60% upside."

The opportunity: Last year, the company launched its Meta Training and Inference Accelerator (MTIA), its first-generation AI inference accelerator, designed in-house with Meta's AI workloads in mind.

  • "These chips are part of our growing investment in our AI infrastructure and will enable us to deliver new and better experiences across our apps and technologies," the company said in the post.
  • Microsoft and OpenAI are working on a massive data center to house an AI-focused $115 billion supercomputer featuring millions of non-Nvidia GPUs.

Zoom in: TechCrunch says Meta spends more on hardware than AI talent.

  • The company is set to spend an estimated $18 billion by the end of 2024 on GPUs for training and running generative AI models.

Between the lines: Nvidia's latest creation, the B200, delivers four times the training performance, 30 times the inference performance, and 25 times greater energy efficiency.

  • As electricity prices continue to rise, energy efficiency will play an increasingly important role in AI.

Follow the money: Companies buying chips for AI applications will face similar challenges as airlines buying planes, balancing efficiency with performance and massive capital investment.

  • While losing out on crucial Big Tech customers, Nvidia sees massive growth from the non-tech sectors of the enterprise, driving the need for infrastructure in both public cloud and private data centers.
  • Bloomberg reports, " Inc. plans to spend almost $150 billion in the coming 15 years on data centers, giving the cloud-computing giant the firepower to handle an expected explosion in demand for artificial intelligence applications and other digital services."

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