JAKARTA - Nvidia CEO Jensen Huang left Taipei on Friday, May 23, after a full week of spotlight and praise from Taiwan's tech industry, and delivered an important message about how the US chip giant plans to maintain its dominance in the market.
Amid Huang's Jensanity' euphoria during the Computex trade show, Nvidia itself is at an intersection. The company has grown to become the world's most valuable chipmaker, but investors are concerned about a decline in AI infrastructure spending and the negative impact of trade friction between the US and China on Nvidia's sales.
The high-tech export restrictions from the US have forced Nvidia to lose its market share in China because it was forced to withdraw its products and design alternative chips with lower specifications to comply with new policies.
Now, cloud computing giants like Microsoft and Google have signaled they will cut spending for AI. Although Huang has announced in the past month various deals worth hundreds of billions of US dollars in areas like the Middle East, analysts warn that such opportunities will be rarer.
"Will every country announce a data center worth 10 or 50 billion dollars like Saudi Arabia? Of course not," said Seaport Research analyst Jay Goldberg. They are starting to run out of clear opportunities.
"AI infrastructure is being built everywhere that's one of the reasons I traveled the world ... AI infrastructure will be part of society," Huang said.
In Computex, Huang introduced a new technology that does not rely on large infrastructure projects from sovereign countries: a new technology called NVLink Fusion.
This technology allows other companies to connect their custom chips to Nvidia's AI infrastructure, making this platform the foundation for third-party innovation.
Instead of having to build all the equipment shelves on its own, companies can innovate or differentiate themselves through their custom chips, said Nick Kucharewski, vice president of Marvell Technology.
This strategy aims to encourage demand for Nvidia's AI network and data center components. The company is also starting to penetrate the corporate market by launching a server line that Huang calls the AI supercomputer for the company.
Huang said this server opens up a market opportunity worth billions of dollars because it can be used for various needs such as graphics, virtual machines, and AI applications.
However, according to Jay Goldberg from Seaport, the company's market is more difficult to enter because the transaction value is smaller than the country's projects, as well as the sales process is more expensive and time-consuming.
"I think we're starting to reach the customer base expansion limit," Goldberg said.
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Nvidia is working with a number of the largest technology companies in Taiwan, such as TSMC (Taiwan Semiconductor Manufacturing Co), which produces many Nvidia chips. However, this complex AI infrastructure is unlikely without hundreds of Taiwanese companies, large and small, supplying components and manufacturing expertise.
Computex's goal is to unite the ecosystem and supply chain, said Ian Cutress, principal analyst at More Than Moore.
The network is critical to supporting various giant projects as announced in the Gulf and is likely to appear elsewhere in the next few months.
The Taiwan industry itself warmly welcomes Huang, who was seen as a local hero born in Tainan before moving to the US at the age of nine.
Before flying again, Huang had appeared with almost all Taiwan's leading technology executives, including Foxconn's Young Liu Chairman, who called Huang the leader of the Taiwan Team'.
MediaTek CEO Rick Tsai even gave Huang a piece of guava in a plastic bag from his favorite fruit kiosk in Taipei.
Meanwhile, Solomon Technology, a provider of industrial automation solutions and AI-based inspections that use Nvidia software, said collaboration with Nvidia was a major impetus for their visibility.
"Cooperation with Nvidia makes us better known. In the past we were not very well known, but with Nvidia's support, now more and more people know us," said Solomon Chairman Johnny Chen.
Solomon's shares have surged 241% since Huang said the company was at the Nvidia GPU Technology Conference in March last year.
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