Nvidia may once again have a golden opportunity.
The semiconductor maker could be one of the big winners from the success of ChatGPT, the trendy new artificial intelligence tool that some see as the dawning of the golden age of AI.
ChatGPT recalls the cryptocurrency mining prompt which had been very lucrative for Nvidia and its Graphics Processing Units (GPUs)-- Nvidia GeForce GTX 1070, Nvidia GTX 1080 Ti and Nvidia GeForce GTX 1060. These GPUs are obviously in competition with those of AMD.
Mining is the process of creating cryptocurrency using your computer. But generating cryptocurrencies like Bitcoin (BTC) involves complex problem solving and/or computation, which only very powerful processors can do. Since a GPU also consists of a powerful processor, as a result it can be used for cryptocurrency mining, and this process is called graphics card mining.
Between $3 and $11 Billion in Revenue
So when cryptocurrency prices skyrocket like in 2021, miners around the globe rush to buy GPUs made by Nvidia and AMD (AMD). But conversely when cryptocurrency prices fall as has been the case since 2022, GPU prices also collapse with a huge impact on the revenues of semiconductor manufacturers.
This is what Nvidia (NVDA) has been experiencing for several months. But ChatGPT could be a game changer. Nvidia, analysts believe, will take advantage of its position as market leader in graphics processors specific to complex computing tasks needed to power AI applications.
ChatGPT is a conversational robot with which humans can converse in natural language. Created by Open AI, it has become the buzz tool in the tech circles since it was launched on Nov. 30.
The more companies and consumers will use these AI applications, especially ChatGPT, the more the demand for Nvidia GPUs computing will increase. Indeed, heavy use of ChatGPT will require more computing power to provide responses to user requests.
"We believe Nvidia has in ChatGPT a potentially meaningful compute demand driver," Citigroup analyst Atif Malik wrote in a recent research note.
The analyst indicates that rapid growth of ChatGPT could result in sales of between $3 billion and $11 billion for Nvidia over one year.
Bank of America and Wells Fargo analysts also share this optimism. For them, Nvidia is one of the companies best positioned to take advantage of the success of AI and more particularly of its great needs in computing power.
Stock Is Up 22% This Year
Nvidia shares are up 22.06% since the beginning of 2023 after having a nightmarish 2022.
GPUs have become essential for processing huge datasets and extracting insights quickly and efficiently. Indeed, traditional analytical systems are not able to ingest millions of records per second. A GPU and can perform specific tasks very quickly.
In less than two months, the ChatGPT chatbot has been a dazzling success. From academics to techies to the general public, the artificial intelligence of the ChatGPT tool blows minds.
ChatGPT stands for "generative pretrained transformer." It is a conversational robot with which humans will be able to converse in natural language.
What is innovative is the fact that this artificial-intelligence interface is perfectly at ease in a conversational mode: You can ask a lot of questions one after the other and expect clear answers.
It is a generalist robot: You can ask ChatGPT to write a film script, the plan for a thesis, or computer code. The most impressive thing, according to AI experts, is the fact that ChatGPT provides its answers both quickly and without any access to the internet.
One of ChatGPT's skills is considered particularly innovative: the robot's ability to break down a complex task into several small elementary tasks, as a computer program would do, to facilitate solutions for human users.
Microsoft (MSFT) wants to introduce ChatGPT into its Azure cloud services. A sign that the software giant is pinning a lot of hope on this chatbot, it has just announced an additional "multibillion dollar" investment in OpenAI.
