The furious contest to unseat Nvidia as king of AI chips

For some crucial AI tasks, firm's rivals prove they can deliver faster speed, and at lower prices

AUSTIN - On the south side of Austin, Texas, engineers at semiconductor maker Advanced Micro Devices designed an artificial intelligence (AI) chip called M1300 that was released a year ago and is expected to generate more than US$5 billion (S$6.74 billion) in sales in its first year of release.

Not far away in a north Austin high-rise, designers at Amazon developed a new and faster version of an AI chip called Trainium. They then tested the chip in creations including palm-size circuit boards and complex computers the size of two refrigerators.

Those two efforts in the capital of Texas reflect a shift in the rapidly evolving market of AI chips, which are perhaps the hottest and most coveted technology of the moment. The industry has long been dominated by Nvidia, which has leveraged its AI chips to become a US$3 trillion behemoth. For years, others tried to match the company's chips, which provide enormous computing power for AI tasks, but made little progress.

Now the chips that Advanced Micro Devices, known as AMD, and Amazon have created, as well as customer reactions to their technology, are adding to signs that credible alternatives to Nvidia are finally emerging.

For some crucial AI tasks, Nvidia's rivals are proving they can deliver much faster speed, and at prices that are much lower, said Mr Daniel Newman, an analyst at Futurum Group. "That's what everybody has known is possible, and now we're starting to see it materialize," he said.

The shift is being driven by an array of tech companies - from large competitors such as Amazon and AMD to smaller start-ups - that have started tailoring their chips for a particular phase of AI development that is becoming increasingly important. That process, called "inferencing," happens after companies use chips to train AI models. It allows them to carry out tasks such as serving up answers with AI chatbots.