Top 3 Reasons Behind the Overwhelming Demand for Nvidia’s Blackwell AI chip

Story Highlights

This week saw the release of a new generation of AI chip and software by Nvidia.
The market for AI technology is enormous; it will likely reach a value of over 1.8 trillion dollars by 2030.
Nvidia releases an update to its GPU architecture every two years, which unlocks significant performance gains.

This week saw the release of a new generation of AI chip and software by Nvidia, which powers AI models. Blackwell is the name of the newest generation of AI graphics processors. The GB200, the company’s debut chip, is scheduled to arrive later this year. Nvidia is luring new orders with the promise of more powerful chips. For instance, businesses and software developers are still frantically trying to obtain the most recent generation of “Hopper” H100s and related chips. Here are three reasons why this chip will spur demand in the market:

China Chip Market Downturn

At present the global AI market is seeing a downturn. Analysts ascribed the decline to the impact of US sanctions on China, the meek global chip market, which is clearing excess inventory, and China’s feeble economic rebound. It’s interesting to note that domestic chip production decreased despite the restrictions and the drop in imports. However, with Nvidia’s new chip, the company can easily overcome these issues.

Expected AI Growth

The market for AI technology is enormous; it will likely reach a value of over 1.8 trillion dollars by 2030, up from a projected 200 billion dollars in 2023. The new chip developed by the company will mint good revenue numbers out of this expected growth itself.

Nvidia’s Chip Advancement

With Nvidia’s new software, applications on any of the company’s GPUs—even the older models that might be more appropriate for deployment but not AI development—will operate more smoothly. Nvidia releases an update to its GPU architecture every two years, which unlocks significant performance gains. The company’s 2022-announced Hopper architecture, which powers chips like the H100, served as the training ground for a large number of the AI models that have been made public in the last year.

With 20 petaflops of AI capability compared to 4 petaflops for the H100, Nvidia claims that Blackwell-based processors, such as the GB200, offer a significant performance boost for AI firms. AI companies will be able to train more complex and large-scale models because to this increased processing capability.