In 2024, the AI chip industry will experience unprecedented growth and NVIDIA will become less of a dominant force in the industry, according to research and analysis company GlobalData. 

US chip giant Nvidia joined the one-trillion-dollar club of companies in 2023 bolstered by the huge demand for its H100 Graphics processing units (GPUs), an essential part of the modern AI infrastructure. 

The demand for Nvidia’s GPUs was so high that it led to chip shortages and supply chain disruptions. Startups that had begun to implement generative AI (GenAI) into their operations were left scrambling for computing power, as enterprise hardware was affected by the slowdown worldwide. 

However, the success of Nvidia led the three major US hyperscalers to announce their own hardware for AI workloads. 

In August 2023, Google announced the latest release of its Cloud’s Tensor Processing Units custom-built to help speed up machine learning workloads. In November 2023, Amazon announced its own CPU chips alongside its powerful ARM-based Graviton chips.

Finally, Microsoft announced its own proprietary chips specifically for AI workloads.

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Nvidia’s rival AMD also launched its Antares Instinct MI300X and MI300A GPU accelerators. AMD claims they boast over 150 billion transistors, 2.4 times the memory of Nvidia’s leading H100.

According to GlobalData’s report, 2024 Enterprise Predictions: Artificial Intelligence, Nvidia will become less of a dominant force in the AI chip industry due to rising competition in the sector.

“As companies of all sizes work to reduce their dependence of Nvidia, alternative chip architectures will grow stronger, with CPUs, ASIC chips, and other designs gaining more ground,” the report stated.

GlobalData predicts that the AI arms race in 2023, which saw companies rush to create their own large language models, will transition to the ‘AI chip race’ in 2024.

This will be seen in not only Big Tech companies, but also amongst startups that will look to create their own proprietary chips, according to the report.

GlobalData forecasts that the overall AI market will be worth $909bn by 2030, registering a compound annual growth rate (GAGR) of 35% between 2022 and 2030.

In the GenAI space, revenues are expected to grow from $1.8bn in 2022 to $33bn in 2027 at a CAGR of 80%.