Is Nvidia’s Reign in the AI Boom Coming to an End? Big Tech Shifts to Custom GPUs
There is growing concern among some in the industry that demand for Nvidia GPUs is maxing out – and that the big players in the AI Race will start using different GPUs. It could be time to start looking for better AI stocks to buy.
Last month, Morgan Stanley upgraded Tesla (TSLA) stock with a Street-high price target of $400. It’s since reduced that target to $380, but it remains the highest analyst target on TSLA stock. Why? Because Morgan Stanley understands how Tesla’s Dojo supercomputer could unlock $500 billion in economic value.
If Dojo is the real deal – and I think it is – then this could mark the end of Nvidia’s (NVDA) rule as the leader of the Artificial Intelligence Boom.
Wall Street’s AI Boom began in late 2022 with ChatGPT’s launch. Since then, Nvidia has been the poster child for AI stocks. That’s all thanks to burgeoning demand for the firm’s next-generation GPUs, which are used to make and run robust AI models. NVDA stock has surged more than 210% higher this year alone.
But there is growing concern among some in the industry that demand for Nvidia GPUs is maxing out – and that the big players in the AI Race will start using different GPUs.
Insert Dojo.
Previously, Tesla powered its self-driving operations with a large Nvidia GPU-based supercomputer. But now, Dojo is Tesla’s AI-powered supercomputer.
Being the brain behind Tesla’s self-driving operations, Dojo parses an incredible amount of driving data to help develop Tesla’s self-driving algorithms.
In other words, Tesla previously used Nvidia GPUs. But now, the EV firm has developed its own supercomputer that uses its own GPUs custom-built for its AI needs.
And that gets to the crux of the problem here: customization.
In the early innings of the AI boom, Nvidia won big by supplying very advanced but very general-use GPUs to companies looking to develop broad AI models.
But as the AI race has matured, those companies are now looking to develop more sophisticated and specialized AI models. For that, they need custom-built GPUs. And economically speaking, it doesn’t make sense for Nvidia to create custom-built GPUs for every single one of its customers.
So, Nvidia’s largest customers are developing their own custom-built GPUs to meet their own specialized AI needs.
Tesla and its Dojo supercomputer are just one example.
In fact, every Big Tech firm building AI models that formerly relied on Nvidia are now developing their own custom-built chips.
Amazon (AMZN) has developed two chips customized specifically to build AI models on the firm’s cloud service, AWS. One is for high-performance inference (AWS Inferentia) and one is for deep-learning training (AWS Trainium). Together, Amazon believes these two chips could power all future AI functions on AWS.
Meanwhile, Alphabet (GOOGL) is already on the fifth generation of its custom Tensor Processing Units, or TPUs, for neural network development.
Reportedly, Microsoft (MSFT) has invested heavily in its own secretive AI chip development project, codenamed Athena. And news broke earlier this year that Meta (META) is developing its own custom chip for running AI models, dubbed the MTIA chip – or Meta Training and Inference Accelerator chip.
Big Tech has made its move. It’s going all-in on AI, and none want to depend on Nvidia to help them win the AI race.
They all want to do it themselves.
That’s why we believe you need to start looking for the top AI stocks to buy – that are not named Nvidia.
See, Big Tech firms aren’t the only companies dabbling in AI.
We’re developing some artificial intelligence of our own.
And just recently, we unveiled our new, state-of-the-art AI-powered trading system, dubbed Prometheus.
Prometheus was trained on hundreds of thousands of financial market data points, with the sole purpose of pinpointing when a stock is about to surge higher.
That is, this next-gen artificial intelligence scans the entire stock market every week to gauge the probability that a given stock will surge higher in price over the next month.
All you have to do is ask Prometheus about a stock, and it’ll give you a score.
The higher the score, the more likely the stock is to surge over the next month. The lower the score, the less likely.
Forget the guesswork and uncertainty surrounding investing. Prometheus provides answers.
That’s an absolute game-changer for anyone with money in the markets.
Imagine knowing, with a quantified measure of certainty, that a stock is either going to go up significantly or down significantly over the next few weeks.
I’m sure it would make a world of difference for your investment strategy. It certainly has for us.
Recently, we started using this AI in real time; and in the second week of September, Prometheus clued us in to a tiny stock that surged 30% by the end of the week.
Point being: Prometheus works. It is an absolute game-changer. And you can try it out yourself here.
This new tool could change investing forever – and help you find the next big AI stock to buy.
Learn all about it.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
