Elon Musk Predicts Nvidia’s Monopoly in A.I. Chips Won’t Last

The company's market cap recently soared past $1 trillion thanks to booming sales of A.I. chips.

Jensen Huang and Elon Musk
Nvidia CEO Jensen Huang (L) and Elon Musk. Kim Kulish/Corbis via Getty Images

There are only a handful of companies in the world worth more than $1 trillion, and semiconductor maker Nvidia (NVDA) recently became one of them, joining the ranks of Apple, Microsoft, Alphabet, Amazon and Saudi Arabia’s state-owned oil producer Saudi Aramco.

Nvidia’s stock price has skyrocketed 165 percent this year, largely thanks to the booming sales of computer chips that power artificial intelligence applications like ChatGPT. Nvidia, a leading manufacturer of graphics processing units (GPUs), is believed to have a virtual monopoly in the A.I. computing market. But Elon Musk, a co-founder of ChatGPT creator OpenAI, believes Nvidia’s dominance won’t last as newer types of chips arrive in the market.

“Many other NN accelerator chips are also under development. Nvidia will not have a monopoly on large-scale training and inference forever,” Musk tweeted yesterday (June 7) in response to a post by Adam D’Angelo, CEO of Quora, a social platform for questions and answers.

The “NN accelerator” Musk mentioned stands for “neural network accelerators,” also known as A.I. accelerators. They are processors designed specifically to handle neural network workloads. In comparison, GPUs are used for more general A.I. models.

As its name implies, a GPU is originally designed to generate graphics on computer screens. Nvidia first applied GPUs in video gaming in the 1990s, and these chips were later used to mine cryptocurrencies and train A.I. algorithms.

It’s estimated Nvidia owns 95 percent of the GPU market. Its A100 and H100 GPUs are in hot demand but supply has been tight.

In his Twitter conversation with Musk yesterday, Quora CEO D’Angelo said the A.I. boom would have been even bigger if there was enough GPU supply. “This shortage is causing all kinds of limits on product rollouts and model training but these are not visible. Instead all we see is Nvidia spiking in price,” he tweeted.

In its latest quarterly earnings release on May 24, Nvidia CEO Jensen Huang said the company was seeing “incredible orders” for A.I. chips. Nvidia expects to rake in $11 billion in revenue in the coming quarter ending July 31, which is over 50 percent higher than what analysts predicted.

Elon Musk Predicts Nvidia’s Monopoly in A.I. Chips Won’t Last