Jensen Huang: The Michael Jordan of Tech CEOs

In its AI ascendancy, NVIDIA finds itself enmeshed in Sino-American power-plays

Happy Friday All,

Today let’s talk NVIDIA. Until recently, this was a company known mostly to dedicated gamers and tech enthusiasts.

Now, NVIDIA stands as one of the most valuable and innovative companies in the history of the world. Its influence is so vast that it's now central to THE geopolitical skirmish set to shape the 21st century: the tech ascendancy of China.

Jensen Huang: The Michael Jordan of Tech CEOs

NVIDIA's monumental success isn't merely a result of providence or luck. Its trajectory has been steered by the visionary at the helm: Jensen Huang. As I told Yahoo Finance, I like to think of him as the ‘Michael Jordan of Tech CEOs.’

As Huang revealed this week, he “bet the company on AI” all the way back in 2018. This was long before the term ‘Generative AI’ became popular and when advancements in Large Language Models (LLMs) were still in their infancy. This ‘slam dunk,’ has to be among the most visionary business decisions ever.

Today, NVIDIA practically monopolizes the hardware market for the AI revolution. They produce about 80% of the chips (or GPUs) needed to power the formidable Generative AI models that are becoming increasingly integral to almost every creative and intelligent human endeavour.

NVIDIA’s New Marvel: The GH200

And NVIDIA isn't resting on its laurels. This week, NVIDIA also announced its latest marvel, the GH200 chip - a ‘super chip’.

Designed to further solidify its dominance in the AI space and fend off competitors, the GH200 carries the same GPU as their premier H100 chip. However, what sets it apart is its coupling with 141 gigabytes of cutting-edge memory and a 72-core ARM central processor.

All this basically means that the GH200 has the enhanced performance, memory and capability to propel AI to new heights. NVIDIA's is likely to maintain its top position, even as all of Big Tech hungrily eye’s NVIDIA’s market share.

“The future is an LLM at the front of just about everything: “Human” is the new programming language.”

Jensen Huang at SIGGRAPH 2023

China’s $5bn Chip Shopping Spree

But this exalted position isn't without its complications. The trillion-dollar company now finds itself embroiled in the tech standoff between Beijing and Washington. As Generative AI, and particularly the development of LLMs, becomes THE number one priority for Big Tech, NVIDIA’s GPUs are ‘rarer than a hens teeth’. Or in the words of Elon Musk, GPUs are “harder to buy than drugs."

China wants them too. So much, in fact, that Chinese internet behemoths, Baidu, ByteDance, Tencent, and Alibaba, have been on a $5 billion shopping spree to hoard the NVIDIA's A800 chip. This includes 100,000 chips worth $1 billion for delivery this year, and an additional $4 billion worth in 2024.

NVIDIA’s Geopolitical Headaches

And why the clamor for the A800 and not NVIDIA’s superior A100? (The GH200 won’t even be available until next year.) Politics, of course. Washington recently imposed export curbs on NVIDIA hardware with the direct aim of suppressing Beijing's tech aspirations. Already, Chinese firms are relegated to the A800— a top-tier chip — but one that falls short of the A100, let alone the GH200.

The rush to secure A800s is intensified by fears that the Biden administration will further tighten its grip, potentially imposing newer restrictions on even this model. (Let’s see what happens with the GH200). This sentiment is bolstered by Washington's recent statements on impending bans on investments into China's quantum computing, chip, and AI sectors. As Chinese tech giants eagerly strive to emulate and exceed Western AI innovations, they are racing against policy, time, and supply constraints.

As NVIDIA finds itself squarely in the crossfire of Sino-American competition, the questions are: how will NVIDIA fare? (My guess is ‘just fine’). And will it be able to maintain its near monopoly on global AI hardware? (I say, ‘yes.’)

Enjoy your weekend,

Namaste,

Nina