5 Minutes Read
Tesla plans to beat Google and Amazon as one of the biggest Nvidia customers
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
Listen to the Article (6 Minutes)
Summary
Semiconductor giant Nvidia has the world’s most powerful, and super-expensive, chips that every tech giant working on artificial intelligence wants. Tesla wants to add 50,000 more chips to its stash making it the third biggest customer for Nvidia after Meta and Microsoft.
Austin, Texas-based Tesla may deploy 85,000 Nvidia H100 chips by the end of the year to train its artificial intelligence (AI) models.
If Chief Executive Officer (CEO) Elon Musk goes through with the plan, Tesla would be a bigger Nvidia customer than other tech giants like Amazon and Google.
Tesla currently has 35,000 H100 chips — the most powerful and super-expensive graphics processing units designed for AI applications — Musk revealed during the company’s first quarterly earnings for 2024.
These chips are crucial for Musk’s AI ambitions, which include advanced robots like the Optimus Bot, the Robotaxi, and a supercomputer called Dojo.
Who are the biggest buyers?
According to reports, Meta, the company behind social media giants like Facebook, Instagram and WhatsApp, is Nvidia’s biggest buyer.
CEO Mark Zuckerberg said in January that the company plans to have about 3.5 lakh H100 chips by the end of 2024, taking Meta’s total stash to about 600,000 by year-end.
In its report, the World Economic Forum added that Nvidia could only make 5.5 lakh chips last year and thus, companies would have to wait till 2024 to be able to procure more.
The second in line is reportedly Microsoft, which ordered 1.5 lakh GPUs in 2023, according to technology research firm Omdia.
“The other 200,000 going to Oracle, Tencent, Google, and Amazon, which reportedly bought 50,000 each,” the report added.
Bloomberg suggests that Meta, Microsoft, Google and Amazon collectively account for nearly 40% of its revenue.
But there’s a growing movement among tech giants to develop chips in-house. Meta is joining rivals Amazon’s AWS, Microsoft, and Google in trying to reduce reliance on this costly chip.
It won’t be a quick fix, though. So far, efforts have yet to dent the industry’s insatiable need for Nvidia’s AI accelerators.
The AI boom has helped turn Nvidia into the world’s third-most-valuable tech company, behind only Microsoft and Apple.
Nvidia’s sales to data centre operators totalled $47.5 billion in 2024, up from just $15 billion the year before. Analysts predict that the sum will more than double again in fiscal 2025.
What is the H100?
It’s a graphics processing unit (GPU) chip that costs tens of thousands of dollars.
Nvidia does not disclose the pricing publicly, but the chips are listed on eBay’s e-commerce platform for as much as $57,000.
Its capabilities are well-suited for training large language models (LLMs), enabling human-like text generation, language translation, and question-answering.
Moreover, it supports the development of AI-powered systems such as self-driving cars and medical diagnosis tools. Due to these capabilities, the demand for the chip is high and supply low, leading to a shortage.
Also Read: NVIDIA Blackwell AI graphics engine to cost ₹25-40 lakh, says CEO Jensen Huang
(With inputs from agencies)
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
3 Mins Read
Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Daily Newsletter
