Despite Nvidia's (NVIDIA) poor performance in December, with stock prices continuing to decline, market analysts believe this may be related to increased competition and a slowdown in artificial intelligence spending. However, today the stock price has rebounded. As of the time of writing, the stock price is still down nearly 3% this month, suggesting that the company may end the year on a subdued note after experiencing significant growth.
Will artificial intelligence spending slow down enough to impact Nvidia? It remains unclear. However, a technology consulting firm recently released a report revealing their estimates of the largest buyers of Nvidia chips. This list includes both tech giants and some companies that seem less likely to become top buyers of AI chips.
Who is buying Nvidia chips in large quantities?
The analysis team behind this Nvidia chip buyer list comes from the global technology consulting firm Omdia. According to the Financial Times, Omdia calculated its estimates by analyzing publicly disclosed capital expenditures, server shipment volumes, and supply chain intelligence.
This analysis primarily focuses on companies purchasing Nvidia Hopper graphics processing units (GPUs), which are popular chips commonly used in data center infrastructure. It is important to emphasize that the data on this list are estimates and not actual order statistics provided by Nvidia.
Omdia's analysts believe that Microsoft is set to order the most Nvidia Hopper chips in 2024, with an expected total of 485,000 units. This number is more than double that of the second-ranked US company, Meta Platforms (Meta), which is estimated to order 224,000 units.
However, among these Silicon Valley giants, two technology companies based in China are also included.
ByteDance (the parent company of TikTok), as a private enterprise, is expected to order 230,000 chips, closely following Microsoft. Meanwhile, the tech giant Tencent Holdings is also expected to order nearly 230,000 units, just behind ByteDance.
The Financial Times adds that the Nvidia chips ordered by ByteDance and Tencent in 2024 include the H20 model, a modified, lower-performance version of the Hopper designed to comply with US export controls on China.
Following Meta, the last three buyers on the list are Elon Musk's companies Tesla and xAI (listed as the same company), along with Amazon and Google.
Will the market landscape change?
This list shows that, according to Omdia's estimates, the three major Silicon Valley giants—Amazon and Google—may have significantly lower Nvidia chip order volumes compared to some competitors. Given the industry's reliance on Nvidia chips and Nvidia's leading position in the field, this raises a critical question: Are Amazon and Google reducing their demand for Nvidia GPUs in favor of using self-developed chips to power their AI platforms?
In fact, other tech companies have been striving to compete with Nvidia's AI hardware. As reported by TheStreet's Silin Chen, "Most AI training uses expensive Nvidia GPUs. Amazon aims to enhance its custom chips to lower customer costs and strengthen supply chain control. This could reduce its dependence on key cloud partner Nvidia."
In April 2024, both Google and Meta announced progress in their self-developed AI chips, promoting them as alternatives to Nvidia chips.
This has sparked what Fortune magazine refers to as the "trillion-dollar question" facing Nvidia: how much of a threat these new chips will pose. Today, experts estimate that these companies have already fallen significantly behind some competitors in terms of Nvidia chip order volumes.
