Nvidia plans to triple production of its $40,000 chips as it races to meet huge demand from AI companies, report says

Hasan Chowdhury
·2 min read
15

  • Nvidia is preparing to at least triple production of its GPUs driving the AI boom.

  • The chip giant was seeking to ship at least 1.5 million H100 processors next year, The FT reported.

  • Demand for these GPUs has soared given their role in building huge AI models behind applications such as ChatGPT.

Nvidia is preparing to triple the production of a $40,000 processor powering the generative AI revolution as the threat of shortages weighs on the ambitions of companies seeking to capitalize on the AI boom, a fresh report says.

The Silicon Valley chip giant wants to boost production of its hotly pursued H100 processor, named after computer scientist Grace Hopper, with the aim of shipping between 1.5 million and 2 million units next year, up from the 500,000 target this year, the Financial Times reported.

Nvidia soared to a $1 trillion market capitalization in May, with AI companies driving huge demand for its processors also known as GPUs – a fundamental component in the development of large language models underlying buzzy AI tools such as ChatGPT.

The importance of processors to the AI boom has led to a global scramble as companies and nation states have raced to secure a strong supply. Earlier this month, the Financial Times reported that Saudi Arabia and the UAE had bought up thousands of Nvidia's H100 units.

Meanwhile, rich VCs with the capital to buy GPUs have been busy purchasing them for portfolio startups seeking to build their own AI models trained on the data they sit on.

Nvidia's AI processors have proven so popular that Chinese firms have been willing to buy them through underground markets in Hong Kong, Reuters reported in June, as US export rules bar Nvidia from selling its top-end processors to China.

Nvidia is preparing to report second-quarter earnings for its fiscal year after markets close on Wednesday, with AI companies and investors set to watch closely to hear CEO Jensen Huang's outlook for products vital to the AI boom.

In Nvidia's first quarter, where it announced a massive 19% jump in revenue to $7.2 billion from the previous quarter, Huang said the company was "significantly increasing our supply to meet surging demand" for products like the H100.

Nvidia did not immediately respond to Insider's request for comment outside regular working hours.

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