NVIDIA in 2024: the chip-powered empire

In the famous book “The Innovation Dilemma”by Clayton Christensen, the concept of disruptive technologies. In his words, these technologies “bring to the market a value proposition very different from that available until now”. Among the characteristics of products classified in this way are generally low prices, greater simplicity, reduced size and, often, more convenience in use.

A classic example mentioned in the 1997 publication is personal computers. Adjusting this concept to the reality of 2024, we can perfectly cite the Generative AI as a disruptive technology.

Generative AI: NVIDIA as the protagonist

The emergence of numerous AI-based services, capable of meeting diverse demands from companies and users around the world, is gradually changing the perception of the future. For some, it is the harbinger of a great catastrophe; for others, a new chapter full of unimaginable possibilities.

Currently, no company has as much impact on the advancement of this market as NVIDIAresponsible for providing hardware and technology solutions that are enabling this transformation.

In the words of Jensen Huang, CEO of NVIDIA, in an interview with Wired, “AI is a redefinition of computing as we have known it for the last 60 years.”

Christensen’s book is one of Huang’s favorites, who applied several of his ideas to position his company as a true titan of the market, reaching the position of the most valuable company in the world for a few moments in 2024.

From GeForce to AI leadership

Until recently, NVIDIA was widely known among graphics card enthusiasts and gamers. The line GeForcefor example, remains a reference for those looking for a new VGA. However, the company’s meteoric growth in 2024, driven by the rise of AI, made NVIDIA transcend its original niche and become a name frequently mentioned in diverse discussions about technology.

In the graphics card market, which has leveraged its trajectory, the achievements achieved in 2024 are impressive. The Q3 2024 report from Jon Peddie Research (JPR) revealed that NVIDIA won 90% of the global market for dedicated GPUs for PCs — the largest market share in its history in this segment.

In 2024 the company also celebrated 25 years of launch of the first video card in the GeForce line, the GeForce 256, launched in 1999.

Innovation and Strategic Vision

Jensen Huang’s leadership demonstrates how avoiding stagnation and embracing innovation is essential to success. NVIDIA’s investment in AI-based technologies to optimize the performance of its GPUs was a wise strategic decision. THE DLSS (Deep Learning Super Sampling) became a reference, solidifying the notion that the AI ​​image scaling market is a path of no return.

Huang has already stated what “it is no longer possible to engage in computer graphics without artificial intelligence.” This is not a passing trend, but a reality that will continue to evolve as hardware solutions dedicated to AI advance.

Adapting to a hostile geopolitical environment

In 2024, NVIDIA had to prove its ability to adapt in the face of a challenging geopolitical environment. Tensions between the governments of the United States and China created numerous obstacles for the company, which responded with specific solutions, such as the launch of modified hardware for the Chinese market, the chip H20. Recently, the company reported a 50% increase in sales of this GPU in China, indicating that the strategy has been working.

However, challenges persist. China opened an antitrust investigation against NVIDIA and has discouraged local companies from purchasing its chips.

The regulatory attention on NVIDIA isn’t just coming from China. France, the European Union and the United States are also examining their market practices, concerned about a possible “strangulation” of competition. These factors point to intense new chapters in this story in the coming years.

Criticisms of the AI ​​market

While NVIDIA reaps the rewards of the booming market, some question the sustainability of this boom. ANDn a letter to investors, the Elliot investment fund called NVIDIA a bubble, arguing that many of the supposed uses of AI will never be economically viable or effective.

The fund also highlighted concerns about energy consumption and the technical feasibility of AI-based solutions. Despite this, NVIDIA’s numbers are impressive.

Omnipresence of chips

In 2024, NVIDIA maintained its absolute leadership in the dedicated AI hardware market. Check out the company’s biggest chip buyers this year:

• Microsoft: 485 mil chips;
• ByteDance (donate TikTok) Tencent: about 230 thousand chips each;
• Meta: 224 million chips.

According to consultancy Omdia43% of global server spending in 2024 will be directed to NVIDIA — an impressive domain!

NVIDIA Market Value (2000–2024)

Growth in NVIDIA’s total market value over the years:

• 2000: US$2.22 billion
• 2010: US$8.94 billion
• 2020: US$323.24 billion
• 2024: US$3.358 trillion

Resilience as a compass

In addition to antitrust investigations, the race for dedicated AI hardware is increasingly fierce. Important NVIDIA partners, such as Meta, Amazon, Microsoft and Google, are developing or have already implemented their own chips, seeking to reduce dependence on the company.

Despite the challenges, NVIDIA’s trajectory since its founding in 1993 shows that resilience is the main hallmark of the empire built by Jensen Huang. In conversation with students at the Stanford Institute of Economic Policy Research (SIEPR), the executive highlighted:

“Most Stanford graduates have very high expectations when graduating from one of the best institutions on the planet. The problem is that people with very high expectations have very little resilience, and unfortunately, resilience is very important for success. I don’t know how to teach you this, except that I hope you have to suffer.”

Huang’s speech follows the lines of one of his best-known phrasess. “If you don’t have tolerance for failure, you won’t succeed.”