It's hard to escape AI in the world of technology. There are apps that are designed around it, apps that use it as a tool, and even apps that let you speak directly to it, like Microsoft's Copilot. But behind the software running our AI programs is an ongoing hardware war where companies are trying to become the top dog of AI processing.

We've already seen the rise of the NPU, a special processor akin to a CPU or GPU that's devoted to AI calculations. And hardware companies around the world are vying to release silicon with powerful NPUs to take advantage of the wave of interest in AI, to the point where you can now purchase an AI PC that's ready to handle all the tools headed our way. However, right now, Nvidia is taking the crown in the AI hardware wars. But it has by no means won the war.

Nvidia cemented itself as an early powerhouse for AI

Companies are now trying their best to wean off of Nvidia's hardware

If you've dabbled in AI, you know about ChatGPT. It was, arguably, the AI service that showed the world just how potent AI could be. But did you know that ChatGPT's developer, OpenAI, used Nvidia's GPUs to get the job done? As reported by Digital Trends, OpenAI alone boosted Nvidia's sales as it bought as many GPUs as it could, and it was by no means the only company out there that relied on Nvidia hardware to give people results.

Now that AI has established itself, companies are trying their best to come off of reliance for Nvidia hardware. As reported by Reuters, OpenAI is now looking into creating its own chips. And as per Quartz, Microsoft also wants to gain some independence with its Azure Maia AI Accelerator and Azure Cobalt CPU as its AI powerhouses. But even if these companies are successful, it will take a while for them to fully migrate off of Nvidia hardware — if they ever do.

Nvidia has entered the AI software scene

It has the hardware, so why not?

Nvidia made a pretty penny funding the AI revolution, but now it is faced with a dilemma. With companies openly and actively trying to swear off Nvidia's hardware, it may struggle to sell the same volume of products to AI services in the future. The solution? Create an AI service yourself and take the fight to them directly. And that's exactly what Nvidia has done.

Nvidia's Chat with RTX feature is based on a simple premise: If people are already installing Nvidia GPUs to perform AI-related tasks, why not give them a chatbot that relies exclusively on them? And if you already have the hardware you need on your PC, then you don't need to connect to the internet and talk with a server to get your responses. You can chat with the chatbot from the comfort of your own home using the LLM of your choice and without having to rely on the internet.

And if you're not interested in that, Nvidia also has tech where you can have dialogue generated for you in real-time in videogames, as shown in the CES 2024 demo we got to check out. This technology, Nvidia ACE, can run in the cloud, but it can also run locally on your PC.

While other companies are trying to get the hardware they need to fuel their AI-powered plans, Nvidia already has it. All it needs to do now is flesh out the AI tools that use its hardware, and it can become a contender in the AI service market too.

Nvidia is soaring ahead in the stock market

Money talks, and right now, it's saying a lot about Nvidia

All this is well and good, but the real proof of success is how well Nvidia is doing financially. At the time of writing, they're doing amazingly. As reported by Investopedia, Nvidia scored the biggest one-day gain ever with $272 billion. A week before achieving this goal, Nvidia surpassed both Amazon and Google's parent company, Alphabet Inc, on the stock market to become the third most valuable company in the US, with only Microsoft and Apple sitting ahead of it.

Investors are very happy with Nvidia's performance, and with the way things look, the company may only see more success on the stock market in the future. And with so much support, Nvidia has the financial weight to start really making even bigger waves in the AI industry.

Nvidia's the king of AI, but it may not be forever

With Nvidia in such a strong position, it's hard to say that it's not the king of AI hardware right now. However, we're still very much in the early days of AI, and things can change. As companies begin to develop their own AI hardware solutions, Nvidia's grip on the market may loosen. However, as of right now, Nvidia is definitely the king of the AI castle.