Nvidia continues to dominate the market for AI chips

Nvidia continues its impressive success in the field of artificial intelligence (AI) in 2024. Companies, governments, and numerous other players eager to jump on the AI bandwagon are scrambling for the company's graphics processors (GPUs) to train and deploy AI models. Since the beginning of the year, the semiconductor giant's stock has seen an impressive increase of 173%. Given the recent developments in the AI ecosystem, this upward trend could continue unabated. The upcoming results for the third quarter of the fiscal year 2025 could serve as an additional driver. Nvidia plans to release the figures for the quarter ending on October 27 on November 20. In the AI chips market, Nvidia competes with Advanced Micro Devices (AMD) and Intel. However, AMD's recent business figures show that the company is still far from matching Nvidia in the AI GPU sector. In the third quarter of 2024, AMD generated $3.5 billion in revenue from its cloud business, a 122% increase compared to the previous year. However, Nvidia’s data center revenues in the second quarter of the fiscal year 2025 were significantly higher at $26.3 billion. It is particularly noteworthy that Nvidia's data center revenues in the last reporting quarter rose by an impressive 154% despite their size. While AMD sells both server GPUs and CPUs, it has not posed a serious threat to Nvidia in the AI market. Intel, which originally planned to sell $500 million worth of AI GPUs this year, had to significantly lower its forecast due to reduced demand. This confirms Nvidia's unrivaled position in the AI chip market. AMD forecasts AI GPU sales of $5 billion for 2024. These figures are significantly lower than Nvidia's quarterly revenues and underscore Nvidia's market leadership. At the current revenue pace, Nvidia could conclude 2024 with annual sales of $84 billion in AI GPUs. Comparing the revenue forecasts of Nvidia, AMD, and Intel, it becomes clear that Nvidia controls more than 90% of the market. Competitors have not made significant progress in the AI chip market for two years, putting Nvidia in the enviable position of capturing the lion's share of spending on AI GPUs.