Chipmaker NVIDIA Corp.’s (NASDAQ:NVDA) CEO, Jensen Huang, shrugged off concerns regarding competition from Advanced Micro Devices Inc. (NASDAQ:AMD), following the latter’s recent partnership with ChatGPT-parent OpenAI.
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We Are ‘Very Different Companies’
Huang said that the two companies are fundamentally different while speaking on the CNBC Investing Club's monthly meeting on Tuesday. “We build some things that are similar in category, but we’re very different companies.”
According to Huang, the company has evolved beyond hardware, saying, “Nvidia started out as a graphics chip company and over time we became a computing platform company.”
Huang's remarks come just days after OpenAI announced it would work with AMD, whose CEO, Lisa Su, who also happens to be Huang’s cousin, reportedly described the MI300X accelerator as an alternative to Nvidia’s GPUs.
Huang highlighted the company’s extensive moats, saying that as a “computing platform company,” lots of developers and entire ecosystems depend on its solutions, and build software that works on its platforms.
In contrast to AMD’s pure hardware approach, Huang underscored Nvidia's role in building out massive-scale AI infrastructure. “Today, when you look at the computers we make, they’re a thousand acres large. It’s a giant system, hundreds of megawatts, gigawatts at a time,” he said.
Responding to claims that AMD's MI450 could match Nvidia's GPUs, Huang was dismissive. “A piece of hardware may not be equal to it for total cost of ownership,” he said, referencing Nvidia's software stack and ecosystem as key differentiators.
Execution Is Key For OpenAI’s Deals
OpenAI struck two major deals with both Nvidia and AMD in recent weeks as part of its multi-billion-dollar AI infrastructure buildout.
It initially inked a $100 billion partnership with Nvidia to deploy 10 gigawatts of computing systems beginning in the second half of 2026. This was followed by another similar deal with AMD last week.
Leading analysts and investors have, however, expressed skepticism regarding the deals, with Investor Brad Gerstner saying on Monday that they remain mere announcements, than actual deployments. “Now we will see what gets delivered. Ultimately, the best chips will win,” he said, emphasizing the importance of execution.
Famed short-seller James Chanos criticized AMD for issuing stock warrants to OpenAI in return for billions in purchase orders. “If you are giving up tens of billions of dollars worth of equity warrants, shouldn’t this deal bring in more than ‘tens of billions of dollars in revenue for $AMD'?” he asked.
Nvidia shares were down 0.25% on Tuesday, closing at $185.04, and are up 0.37% pre-market. The stock scores high in Benzinga’s Edge Stock Rankings across Momentum, Growth and Quality, and has a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.
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