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Nations building their own AI models add to Nvidia's growing chip demand

Economic Times · 3m

Countries worldwide are increasingly developing their own language-specific artificial intelligence (AI) models, leading to high demand for Nvidia's chips. These AI models are being used in various sectors such as businesses and government organizations, with a focus on generative AI. Nvidia's sales outlook for the third quarter didn't meet investors' expectations, but the company expressed optimism in gaining new customers globally, including governments. Customized AI models, incorporating language, culture, and data specific to each country are considered national imperatives. Governments are also turning to AI to enhance national security. Nvidia's revenue from countries adopting their own AI applications is expected to be in the low double-digit billions by January 2025, surpassing earlier predictions. The concept of creating localized AI models is driven by the need for customized hardware and software arrangements to meet each country's unique requirements. In 2023, Washington tightened export controls on advanced chips to China, impacting Nvidia's sales in the region. On the other hand, businesses are capitalizing on government initiatives to develop AI platforms using regional languages. For instance, IBM is collaborating with Saudi Arabia's Data and Artificial Intelligence Authority to train an Arabic language model. The trend of countries developing their own AI models presents growth opportunities for Nvidia's GPUs, alongside investments from major cloud providers like Microsoft.