Jun 3, 2024 - Economy

Chip wars intensify amid growing costs

two photos side by side of a woman and a man holding up computer chips

AMD CEO Lisa Su and Nvidia CEO Jensen Huang. Photos: Annabelle Chih/Bloomberg via Getty Images; David Paul Morris/Bloomberg via Getty Images

Nvidia and AMD unveiled new AI chips in back-to-back announcements Sunday and Monday, respectively.

Why it matters: There's no such thing as "too soon" when it comes to grabbing market share in this space.

Between the lines: Nvidia's new Rubin chip platform announced Sunday comes just two months after its Blackwell reveal in March.

  • AMD's announcement Monday of its new Ryzen AI 300 and Ryzen 9000 laptop and desktop chips, respectively, come after the company's last new chip announcement just in April.

The big picture: AMD, Intel, Qualcomm, Microsoft, Google and Amazon are among Big Tech names racing to catch up with Nvidia.

  • The AI chip leader has promised to speed up its development timeline from a 2-year cadence to one year.

The intrigue: Companies across various industries have been spending huge sums of money to boost their operations with new AI technologies. But the verdict is still out on how and when they'll see returns on those investments.

  • VC firm Sequoia has estimated that the AI industry spent $50 billion on Nvidia chips alone to train advanced AI models, but brought in only $3 billion in revenue, WSJ reports.

What we're watching, via WSJ's Christopher Mims: Given the costs of developing new AI, the slowing rate of improvement for AI and what appears to be fewer applications than originally imagined, there's mounting evidence to suggest that AI will not be as transformative on our lives and our economy as quickly as some have thought.

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