Nvidia stock has come under pressure after a recent report that OpenAI is exploring plans that could cut out the chip maker as a supplier. But there remain good reasons to stay bullish on Nvidia.
OpenAI, a leader in artificial intelligence backed by Microsoft whose launch of the ChatGPT chatbot kicked off an AI investing frenzy, is exploring making its own AI chips, Reuters reported late last Thursday, citing anonymous sources. Amid a shortage of chips to fuel AI growth, OpenAI is also considering options including working more closely with chip makers like Nvidia or diversifying its suppliers beyond the company, the report said.
“We continue to expect Nvidia to maintain ~90% share in the AI GPU market for the next 2-3 years,” analysts at Citi wrote in a note Friday. The analysts added that the Reuters report, if true, would be not so surprising—and consistent with the view that GPUs and ASICs will be needed to ramp up necessary infrastructure in AI.
“We foresee ASICs being primarily used for smaller and more specialized models and GPUs for both training and inference of larger/more complex models,” the analysts said. Nvidia stock was down 2.2% at 10:23 a.m. on Monday, underperforming both the S&P 500 and Nasdaq Composite, which were down 0.2% and 0.5%, respectively.
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