Nvidia (NVDA) unveiled a slew of new technologies this week at its GTC conference, ranging from an AI-powered chauffeur who can park your car to a tool that predicts wildfire paths. All from a company that began by selling graphics cards to gamers.
Nvidia, on the other hand, still makes the majority of its money from the sale of those cards. In the second quarter, its gaming division accounted for 47 percent of total revenue, while its data center division accounted for 36 percent.
And, while Nvidia has roughly 83 percent of the market share compared to AMD’s (AMD) 17 percent, it has serious competition vying for its throne. First, there’s Apple (AAPL), which has rushed to develop its own laptop chips with graphics capabilities that it claims can compete with Nvidia’s best offerings. Intel (INTC) is also preparing to launch its own line of graphics chips, which could pose a significant challenge to Nvidia.
This is due to the fact that, unlike Apple’s chips, Intel’s graphics processors will be found in Windows laptops and desktops. Windows PCs are the go-to computers for gamers all over the world, and if Intel releases chips that can compete with Nvidia’s capabilities, it could pose a long-term threat to the gaming titan. Nvidia is a beast in the gaming and AI markets, but it is quickly gaining new competitors. While the company’s RTX cards are among the most powerful on the market, they are not the only option for consumers and businesses.
While AMD does not have Nvidia’s market share, it offers the capabilities that gamers seek at comparable prices. Meanwhile, Intel is preparing to launch the first true competitors to mainstream Nvidia and AMD graphics with its Arc Alchemist chips for laptops and desktop cards.
Intel claims that its chips will support technologies such as DirectX Ray Tracing, variable rate shading, and mesh shading — in other words, everything that makes games look and run well. It’s a direct hit on Nvidia’s most important business.
Intel isn’t Nvidia’s only new rival. With its M1 Pro and M1 Max chips, Apple has emerged as a surprising dark horse in the graphics game. The chips, which power the company’s MacBook Pro 14-inch and MacBook Pro 16-inch laptops, make Apple’s laptops, according to the company’s own numbers, every bit as capable in terms of graphics performance as those powered by Nvidia chips.
According to Apple’s testing, the M1 Max-powered MacBook Pro 16-inch with 64GB of RAM outperforms Razer’s Blade 15 Advanced, which has an Intel Core i9 processor, 32GB of RAM, and an Nvidia RTX 3080 in terms of performance and power efficiency. Both systems cost about the same.
Of course, there are some caveats. Specifically, Apple does not have a strong presence in the gaming industry. Sure, there are games available on the App Store, but if you want AAA titles from the world’s biggest developers, you’ll have to look to PC. Nvidia is facing stiffer competition in areas other than gaming. AMD unveiled its new MI200 GPU for high-performance computing and AI acceleration on Monday, aiming to compete with Nvidia in the data center. Not to be outdone, Intel is expected to release its own Ponte Vecchio GPU for AI applications in 2022.
Despite facing stiff competition, Nvidia remains a force to be reckoned with, thanks in large part to its software.
Nvidia also profits from the sale of full-fledged supercomputers for AI applications, which can cost hundreds of thousands of dollars. Furthermore, Nvidia benefits from primarily working with GPUs. It does not sell both CPUs and GPUs, unlike AMD, and it is not reentering the discrete GPU market, unlike Intel. The company plans to launch its own CPU code, dubbed Grace, to ensure that it can provide its customers with its own CPU — but for the time being, it has been able to focus all of its efforts on GPUs.
Nonetheless, Nvidia’s competitors aren’t sitting idle. And, while the company is currently the market leader, there is no guarantee that it will remain so indefinitely. It must continue to innovate at a rapid pace if it is to maintain its position at the top.