Subj : Nvidia and AMD may face entirely new threat from $100 billion fir
To   : All
From : TechnologyDaily
Date : Fri Oct 13 2023 21:45:04

Nvidia and AMD may face entirely new threat from $100 billion firm  will 
OpenAI end up buying Graphcore to build its own chips?

Date:
Fri, 13 Oct 2023 20:29:13 +0000

Description:
The once bullish startup is now struggling to stay afloat, with OpenAI keen 
to get in the chips business.

FULL STORY
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Graphcore, the chipmaking startup that once counted Microsoft among its 
customers, may struggle to stay afloat unless it pulls in millions of dollars 
in financing within the next few months, according to its latest accounts. 

Although the explosion of the AI industry means chips are in high-demand, 
Graphcore hasnt been able to capitalize on this. The UK-based unicorn was 
once considered a key rival to the likes of Nvidia and AMD, having achieved a 
valuation of $2.5 billion in 2020 following its latest funding round. But due 
to lower sales from key strategic customers, revenues have fallen, according 
to Sifted . 

To underline its woes, the company once agreed to a deal with Microsoft, 
itself an investor in the company, this eventually fell through when the firm 
decided not to continue using Graphcores chips in its cloud computing 
systems. Could OpenAI be Graphcores savior and shake up the market? 

The company has less than a year now to raise capital to continue functioning 
as a healthy business, according to the Financial Times (FT) , and is seeking 
another funding round, with discussions underway with potential investors. 

In light of the AI emergence, and with the chips market really hotting up 
OpenAI is rumured to be seeking to make its own AI chips , rather than run on 
the likes of Nvidias A100 GPUs to power its generative AI platforms like 
ChatGPT . 

OpenAI has gone so far as to identify potential acquisition targets, reported 
Reuters , but hasnt yet decided to move forward on any particular course of 
action. The main reason is that with chips in high demand, and only a handful 
currently mass-producing the components required to power AI workloads and 
LLMs, theres a shortage. 

The $100 million Silicon Valley giant has also considered building its own 
chip, working closely with other chipmakers  such as Nvidia  as well as 
diversifying its supply beyond just Nvidia, which is the industry leader. The 
GPU maker has an 80% stranglehold on the market right now, although 
challengers are beginning to emerge, and innovative solutions are in the 
works. 

Should OpenAI decide to invest in a chipmaking firm to build its own 
powerhouse to either guarantee a supply or crack open the market, it neednt 
look further than Graphcore. Theres no guarantee it will, but perhaps an 
early investment may be on the cards as a first step into something that 
could potentially develop into a much bigger partnership. More from TechRadar 
Pro What is an AI chip? Everything you need to know Meet the Nvidia GPU that 
makes ChatGPT come alive This tiny UK startup chipmaker is targeting Intel 
and Nvidia with a monster AI CPU



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Link to news story:
https://www.techradar.com/pro/nvidia-and-amd-may-face-entirely-new-threat-from
-dollar100-billion-firm-will-openai-end-up-buying-graphcore-to-build-its-own-c
hips


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