The manufacturer Nvidia, known among gamers for its Geforce graphics cards, has long had its sights set on the current hype surrounding AI tools such as ChatGPT, as statements by CEO Jensen Huang recently made clear:
Nvidia via ChatGPT: As influential as the iPhone
No wonder, after all, it requires a lot of computing power. Appropriately enough, Nvidia offers them with its professional workstation GPUs and they are already being used intensively for ChatGPT & Co. But could this hype have a negative impact on Geforce GPUs?
This is exactly the concern that the US website Techradar is currently bringing in an article
Even Nvidia can only produce a limited number of graphics cards
The core of Techradar’s fears is focused on the upcoming GPU generation RTX 5000 and the question of production capacities. More specifically, the concern is this:
If the demand for Nvidia’s workstation graphics cards increases (even more) due to the AI hype, this coupled with limited manufacturing options could lead to fewer Geforce models on the market and thus to higher prices. Because more money can potentially be made with expensive workstation hardware than with gaming GPUs, which would make such a prioritization by Nvidia plausible.
Certain statements about this development are not possiblebecause you would not only have to know exactly how great the demand will be in the future, but also how high the maximum production capacities are in each case. In our view, however, there are a number of factors that tend to speak against itthat such prioritization is really necessary.
Incidentally, according to a recent survey we did on your graphics cards, the very expensive Geforce RTX 4090 comes in second place with a distribution of at least six percent. The RTX 4080 follows in fourth place with five percent, the RTX 4070 Ti in twelfth place with three percent.
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The need for complex AI calculations is also limited
While the last mining hype generated broad interest from private individuals in Geforce graphics cards, this is about special interest from suitable research institutions and more or less large companies that need workstation performance to varying degrees.
In many cases, you will not buy the right hardware yourself, but instead outsource it to large providers with the necessary server and cloud capacities.
Another important factor: There are only very few companies like TSMC or Samsung that can manufacture the chips that Nvidia, Apple, AMD & Co. need for their products. However, the shortage of chips during the Corona crisis has caused these major customers to look far ahead, who, as far as possible, have contractually secured the necessary production capacities years in advance.
Nvidia was probably less surprised by the AI hype than the masses and is fully prepared to lucratively accompany it with its own products. At the same time, gaming graphics cards are still a very important business for Nvidia.
Enormous sales with Geforce GPUs possible
In the wake of the end of the mining hype and a certain normalization on the GPU market (apart from the often still extreme prices), Nvidia’s sales of gaming graphics cards have clearly declined. However, the trend in the last quarterly figures is pointing upwards again and the figures are still very high.
More specifically, gaming revenue recently increased to $1.831 billion from $1.574 billion in the previous quarter. While that’s a far cry from the best three quarters earlier, which was $3.62 billion, it’s still a lot of money.
At the same time, it can be assumed that the current lead of the data center division, which was last 3.616 billion US dollars, will remain the same or even increase. However, we are certain that gaming will remain the second, important mainstay at Nvidia in the future.
It cannot be ruled out that unforeseeable factors will again lead to a major chip shortage. However, the AI hype alone should not become a problem for gaming graphics cards, especially since sooner or later competitors like AMD and Intel will want a piece of the cake.
How do you assess the situation? Could a big focus on the AI business see Nvidia making significantly gaming graphics cards sometime in the near future, leading to (even) higher prices? Or will the business with Geforce GPUs remain Nvidia’s second mainstay for generating sales and profits in the longer term? Feel free to write it in the comments!