Nvidia CEO Jensen Huang is set to take the stage at the company’s annual software developer conference, defending its position as the dominant force in the AI chip market. The nearly $3 trillion chip giant faces increasing pressure as major customers look to control AI costs.
The conference follows concerns raised by China’s DeepSeek, which introduced a chatbot requiring less computing power than competitors, causing Nvidia’s stock to drop. Nvidia’s revenue has surged over the past three years, exceeding $130.5 billion, primarily due to its high-performance chips.
At the event, Nvidia is expected to unveil details about its next-generation Vera Rubin chip system, named after the astronomer known for her work on dark matter. This chip is set for mass production later this year, despite delays in its predecessor, the David Blackwell chip, which impacted Nvidia’s profit margins.
Shifting AI Market and Growing Competition
Nvidia has long dominated the AI training market, where large models are fed data to improve their intelligence. However, competition is growing in the inference market, where trained AI models generate responses. With a 90% market share in training, Nvidia faces rivals like AMD and AI-focused startups offering lower-cost inference solutions.
Startups and competitors are betting on energy-efficient chips to compete with Nvidia, whose GPUs consume significant power, even prompting AI firms to explore nuclear energy solutions. Critics argue that Nvidia’s focus on larger and more powerful chips may not align with the evolving needs of AI inference.
However, Nvidia is positioning itself for a new AI phase called “reasoning,” where chatbots analyze their own responses for improved accuracy—an approach that demands greater computational power, favoring Nvidia’s high-performance chips.
Expanding Beyond Chatbots
Beyond AI chips, Nvidia is expected to share updates on quantum computing, a field where Huang’s skepticism earlier this year led to stock declines in quantum-focused companies. In response, Microsoft and Google asserted that quantum advancements are progressing faster than expected. To address this, Nvidia has dedicated an entire day of its conference to discussing quantum computing and its role in the field.
Additionally, Nvidia is working on central processing unit (CPU) chips for personal computers, potentially challenging Intel’s remaining market share.
Huang’s keynote speech on Tuesday will set the tone for Nvidia’s strategy amid evolving AI landscapes and rising competition.
