Nvidia, the world’s most valuable company, is set to design server racks for its upcoming flagship GB200 AI chips, a move that could disrupt traditional server designers like Dell, HPE, and Supermicro. This initiative may impact the profit margins of these server makers, who have long benefited from the increased sales of Nvidia chips.
With a strong foothold in the AI chip supply chain, Nvidia is leveraging its position to explore new revenue streams. The company’s dominance in the AI space makes it difficult for customers to switch to alternatives, which is evident from a recent conflict between Nvidia and Microsoft over server rack designs. While the details of this disagreement remain undisclosed, Nvidia eventually withdrew its demands.
Nvidia’s CEO, Jensen Huang, is reportedly concerned about a potential slowdown in chip sales, particularly due to uncertainties surrounding the data center space availability for major clients like Microsoft and Amazon Web Services. Huang has called meetings with company executives to address this issue, as he worries that if these clients do not have sufficient space to deploy more AI chips, it could negatively impact Nvidia’s sales performance.
Overall, Nvidia’s foray into designing server racks for its new AI chips indicates the company’s intent to expand its product offerings and revenue streams. However, this move also raises questions about the competitive landscape in the server market, as traditional players may face challenges in adapting to Nvidia’s evolving strategies. Huang’s concerns about potential sales impact due to data center space limitations underscore the importance of anticipating and addressing market dynamics to sustain growth in the rapidly evolving AI industry.
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https://timesofindia.indiatimes.com/technology/tech-news/how-nvidias-new-hardware-plans-may-be-bad-news-for-dell-hpe-and-others/amp_articleshow/111147964.cms