With the rapid advancement of artificial intelligence technology, AI chips have become the core driving force behind this transformation. In 2024, the demand for AI chips from large tech companies has witnessed unprecedented growth, reshaping the competitive landscape of the chip market and having far-reaching implications on the global economy.

Current Status of the AI Chip Market:
●Intensified Technological Competition: As AI technology rapidly advances, the demand for high-performance AI chips continues to grow. Tech giants such as Meta, Microsoft, Google, AMD, and Intel are actively developing their AI chips to reduce dependence on market leaders like Nvidia, indicating that the competition for AI chips in 2024 will be more intense.

●Market Leader: Nvidia dominates the AI chip market with nearly 80% market share, especially in the GPU field. Its custom chip H20 for China has started accepting bookings. The demand for Nvidia's H100 chips is soaring, with high prices, becoming one of the reasons why many companies are seeking alternative products.

●Emergence of Emerging Enterprises: Despite the market being dominated by large companies, many startups and emerging enterprises have made significant progress in the field of AI chips, particularly in the development of specialized chips such as ASIC and FPGA.

●Dynamics of Domestic and Overseas Markets: The Chinese AI chip market is growing rapidly, with domestic companies such as Huawei HiSilicon and Cambricon Technologies reaching international advanced levels in some fields. However, overall, there is still a gap between China's AI chip industry and international advanced levels.

●Expansion of Application Areas: The application scope of AI chips continues to expand, from cloud computing and big data analysis to autonomous driving, intelligent manufacturing, healthcare, and other fields.

AI Chip Strategies of Large Tech Companies:

●Independent Research and Innovation: Many large tech companies are independently developing AI chips to reduce reliance on existing suppliers and enhance the competitiveness of their products. For example, Meta plans to deploy the new custom AI chip Artemis, Microsoft has the AI chip Maia 100, Intel has the AI chip Gaudi3, and AMD has launched the MI300X chip. Large tech companies are accelerating the innovation and application of AI chip technology through independent research or strategic cooperation.

●Market Diversification: With the increasing demand for AI chips, large tech companies are also exploring diversified supply chains to ensure the stability of chip supply. This includes establishing partnerships with different chip manufacturers or accelerating technological development through acquisitions.

●Performance Improvement and Cost Control: The performance of AI chips directly affects the effectiveness of AI applications, so improving chip computing power is crucial. At the same time, large tech companies are also seeking to reduce costs through technological innovation, such as adopting advanced process technology and Chiplet packaging technology.

●Ecosystem Building and Software Adaptation: The success of chips depends not only on the hardware itself but also on the support of software ecosystems. While developing AI chips, large tech companies are also building corresponding software ecosystems, including tools, frameworks, and APIs, to enable developers to better utilize the capabilities of chips.

●Cloud Services and AI as a Service (AIaaS): Large tech companies provide AI services through cloud platforms, requiring strong support from AI chips. Therefore, they may develop AI chips optimized for cloud services to provide better services and attract more users.

Financial Impact of AI Chips:
The rapid development of AI chips has had a significant impact on the financial sector. It has driven the growth of the semiconductor industry, and according to a report by Huajing Industry Research Institute, the global AI chip market is expected to reach $67.1 billion by 2024. The high demand for AI chips has also driven up the stock prices of related companies, such as AMD, which has surged by approximately 140% in the past year.

SOURCE：Investing
Data as of May 13,2024

The Rise of China's AI Chip Industry
The AI chip industry in China is also experiencing rapid growth. According to analysis from Huajing Industry Research Institute, the market size of China's AI chip industry reached 85 billion yuan in 2021, with a compound annual growth rate of 67.7%. Domestic companies such as Huawei HiSilicon and Loongson Technology have made significant progress in the field of AI chips, demonstrating strong market competitiveness.

Future Trends and Challenges
Looking ahead, the AI chip industry will continue its rapid development trend. However, this field also faces fierce international competition and technological challenges. Large tech companies need to continuously increase their R&D investment, drive technological innovation, and respond to evolving market demands.

In 2024, the demand for AI chips from large tech companies is expected to continue growing, which will not only further drive the development of AI technology but also have a significant impact on the global economy. In this process, the Chinese AI chip industry is poised to play a more important role in the global market.

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