AFTER A COUPLE decades of software eating the world, the "silicon" part of Silicon Valley is back. It turns out, it takes hard-core hardware-lots of it to bring the wonders of generative AI to life, and chipmaker Nvidia has seized the moment with its powerful graphics processors to become the market's reigning champ.
Demand for Nvidia's AI-friendly processors is so strong that in May, investors awarded the company a stock market valuation above $1 trillion, roughly on par with the GDP of Saudi Arabia last year. Chips certainly have the potential to become as vital as oil in an AI-driven economy-but in the fast-moving tech business, even a market leader can't sit back and rely on proven reserves to prolong its primacy.
For Jensen Huang, Nvidia's leather-jacket-wearing CEO, the most serious threat comes from a crosstown chipmaker armed with a unique combination of graphics-processing prowess and a corporate identity forged by years of taking on giants. Led by Lisa Su, AMD is aiming to take a sizable chunk of the AI chip market and, as the AI revolution unfolds, even to displace Nvidia as industry leader.
"I think this is an opportunity for us to write the next chapter of the AMD growth story," Su told Fortune in a mid-September interview. "There are so few companies in the world that have access to the [intellectual property] that we have and the customer set that we have, and the opportunity frankly to really shape how AI is adopted across the world. I feel like we have that opportunity."
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