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Nvidia Targets Partnerships, Value to Retain AI Chip Market Share

Nvidia has taken a number of steps to maintain its dominant position in the field of artificial intelligence (AI) chips, Nvidia CEO Jensen Huang said Wednesday (June 26).

Speaking during the company’s shareholder meeting, Huang said the firm has already “transformed” from a gaming-focused company to a data center-focused one; is partnering with computer makers and cloud providers to create new markets for its AI; and is offering chips whose performance and operating costs make them a better value than others that may be cheaper to buy, CNBC reported Wednesday.

Beyond that, Huang said Nvidia has achieved a “virtuous circle” in which the number of customers it has allows it to build products that attract even more customers, according to the report.

“The Nvidia platform is broadly available through every major cloud provider and computer maker, creating a large and attractive install base for developers and customers, which makes our platform more valuable to our customers,” Huang said, per the report.

Nvidia has a market share of greater than 80% in AI chips, according to the report.

Huang’s comments on how the company is working to maintain this market share came in response to a question about the growing competition in the field, as both existing companies and startups release new AI chips, per the report.

Nvidia has been in close competition with Microsoft and Apple for the title of the world’s most valuable company. Like Nvidia, those companies have seen their shares and their market capitalization rise amid the wave of investor interest that has created an AI boom.

In May, Nvidia reported earnings that beat Wall Street expectations and outpaced its own outlook for the quarter. The company’s revenue reached $26 billion, which was 18% higher than the previous quarter and 262% higher than the same period a year earlier.

At the same time, Big Tech firms are racing to develop custom chips that supercharge the efficiency and cut the costs of AI. Competition is intensifying in the AI chip market as the field gets more crowded and as companies vie for a share of this rapidly expanding industry.