NVIDIA Upgrades AI Chip to H200: Amazon, Google, Oracle to Adopt in 2024

NVIDIA, the foremost global chip manufacturer, is advancing its H100 artificial intelligence (AI) processor to augment the capabilities of its flagship product, which has historically positioned the company as a leader in the competitive AI computing landscape.

In a November 13th announcement, NVIDIA revealed that the new iteration, labeled H200, will integrate cutting-edge high-bandwidth memory (HBM3e). This enhancement will empower the processor to adeptly handle the voluminous datasets requisite for AI development and deployment. Pledges to adopt the H200 chip have been made by prominent cloud infrastructure providers, including Amazon's AWS, Alphabet's Google Cloud, and Oracle, with implementation slated to commence in the upcoming year.

Reports underscore the existing fervent demand for NVIDIA's current H100 processor, renowned as an AI accelerator. Nevertheless, intensified competition looms, with AMD poised to launch its rival MI300 chip in the fourth quarter, and Intel asserting the superior speed of its Gaudi 2 compared to the H100.

NVIDIA asserts that the H200 aims to remain synchronized with the expanding scale of datasets integral to AI model creation and service provision. The augmented storage capacity is anticipated to expedite the execution of tasks such as AI training for image and speech recognition.

Dion Harris, overseeing NVIDIA's data center products, remarked, "Observing market trends reveals a rapid expansion in model sizes. This underscores our commitment to promptly introduce the latest and most advanced technology."

Anticipated adoption of the H200 by major computer manufacturers and cloud service providers is slated to commence in the second quarter of the forthcoming year.

NVIDIA's technological prowess has not only secured substantial orders in data centers but has also established a benchmark in AI computing, propelling the company's market value beyond the remarkable milestone of $1 trillion. This achievement positions NVIDIA as the inaugural chip manufacturer to attain a trillion-dollar market capitalization, surpassing competitors such as Intel.

Nevertheless, challenges persist for NVIDIA this year, including restrictions on selling AI chips to China. Ongoing efforts by the U.S. government to control the inflow of advanced technology have impacted NVIDIA's sales in the world's largest chip market.

A recent report from Chinese media highlights these regulations, explicitly prohibiting the import of H100 and other processors from the U.S. Despite these challenges, NVIDIA remains committed to developing innovative AI chips tailored for the dynamic Chinese market.

Investors can expect a comprehensive update next week, as NVIDIA is scheduled to unveil its latest financial report after the close of the U.S. stock market on November 21st.