By Nvidia continues to solidify its position as a leader in cloud-computing platforms for artificial intelligence (AI) projects, according to a recent analysis by Jefferies. Analyst Mark Lipacis examined data from six major cloud-based service providers and found that Nvidia’s market share for AI workloads has increased by 3.5 percentage points in the past year, reaching an impressive 85%.
Lipacis noted that Nvidia dominates the field of dedicated AI accelerator instances among public cloud-computing vendors. He also highlighted the fact that Nvidia accounted for nearly all of the incremental overall accelerator deployments since February 2022. Accelerators refer to specialized semiconductors used in AI applications.
While Nvidia’s shares were down slightly on Thursday, the analyst maintained his Buy rating for the stock. Lipacis expects Nvidia’s second-quarter data center revenue to surpass that of Intel and Advanced Micro Devices (AMD) for the first time in history when the chip maker reports next week.
A major advantage for Nvidia lies in its high market share for AI chips, positioning the company well to benefit from generative AI software that can generate content by analyzing text, images, and videos. The release of OpenAI’s ChatGPT last year sparked significant interest in this form of AI.
The cloud service providers tracked by Jefferies include Alibaba Aliyun, Amazon Web Services, Microsoft Azure, Google Cloud Platform, Oracle Cloud, and Tencent Cloud. These vendors offer data-center computing power to their customers.
Nvidia’s chips are widely used by both startups and corporations for AI applications due to their robust software programming platform ecosystem known as CUDA. This platform has been instrumental in enabling developers to build and share AI-related tools and software libraries over the past decade, making it easier to rapidly develop AI applications.
The positive outlook for Nvidia is further supported by recent statements from senior executives at Microsoft and Alphabet, Google’s parent company. Both companies have expressed their plans to make aggressive investments in AI infrastructure in the coming year, further bolstering Lipacis’s confidence in Nvidia’s future revenue prospects.
In conclusion, Nvidia’s dominance in cloud-computing platforms for AI projects continues to grow, and the company’s strong market share for AI chips positions it well for future success in the rapidly expanding AI industry.
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