Beyond the limits of physics: Nvidia's $10 billion chip

Welcome to AI Collision 💥,

In today’s collision between AI and our world,

• $10 billion worth of R&D in a Pringle chip

• $40 billion worth of PIF money into AI

• Smart turtle

If that’s enough to get the transistors transisting, read on…

AI Collision 💥 bargain price just 4.8 cents per transistor

Two hours, three minutes and four seconds.

If you’ve got the time, here’s the Nvidia keynote by founder/CEO Jensen Huang from the company’s GTC developer conference on Tuesday, as promised:

Once you’ve taken the time to watch that, you’ll have a better idea as to just how far in front of the competition Nvidia is.

But, if you couldn’t be bothered with that, CNBC’s Jim Cramer sat down with Huang for an interview shortly after that’s only four minutes and forty-five seconds long.

That’s worth a look too.

Especially when Huang gets along to Nvidia’s latest, greatest chip which he says the company had to go “beyond the limits of physics” to achieve.

Check it out here:

What’s crazy here is the kind of resources that go into a leap forward in processing like this.

When asked just how much R&D goes into a single chip like this, Huang’s estimation was around $10 billion dollars.

Just to make the next generation of processor.

That is astronomical capital expenditure. But it’s also why the estimates are that the B200 AI GPU will sell for somewhere around $30,000 to $40,000 when it’s released in 2025.

That’s because the B200 (the B stands for Blackwell, named after mathematician David Blackwell) has according to Huang, 208 billion transistors.

The TL;DR on transistors is that they are like digital switches, think neurons in the brain, that can be configured to be incredibly “smart”. They can then process a lot of data needed to power software that ultimately comes to us in the form of what we know as “AI”.

To pack 208 billion of them into a chip that’s not MUCH bigger than a Pringle potato chip, that’s quite the herculean feat.

This B200 “AI superchip” leaves Nvidia’s previous “Most powerful GPU in the world today” in the dust. That is, the Hopper 200 – named after Grace Hopper, the computer scientist and mathematician – or H200 as Nvidia’s product name states. The image below shows them both, the slightly smaller H200 in Huang’s left hand, the B200 in his right hand.

The H200 has 80 billion transistors for transistor comparison.

Nvidia says this is another game changer in AI chips. Better power, better efficiency, and with its Blackwell compute platform, just another massive transformation of the AI game.

The stock market had no idea how to treat this product announcement.

At one point Nvidia’s stock was down to $850. Then it hit a high of $905, a 6.5% intraday swing. And then it just closed 1% higher than Monday’s close.

But make no mistake, Nvidia is way in front of the competition. AMD is its next best thing. Its most powerful chip, the MI300X, is packing around 153 billion transistors.

AMD is close on that front, but it’s not just about how big your transistor count it, it’s how you use it…

Simply put, Nvidia continues to spend big on R&D, launch to market ever more impressive and powerful “chips” and be the key driver of the AI revolution.

For now, it doesn’t look like anyone is really all that close to toppling this tech giant.

Also… I wonder how many other famous mathematicians it’s got left to name its products after?

AI Gone Wild 🤪

If you’ve made trillions of dollars over the years in oil money and you’re sitting on a gigantic pile of billions in profits (quite likely trillions) that’s day by day becoming more and more worthless, what would you do?

This is the problem faced by Saudi Arabia through its public investment fund (PIF).

It’s estimated the PIF has over $770 billion in assets under management, but let’s be honest, do you really think those numbers are honest?

Let’s assume the ballpark is $770 trillion to $1 trillion (and I suspect the higher is more likely). But you’re also thoroughly aware there is a global process of dedollarisation taking place – that simply means the world (particularly the BRIC nations) is weaning itself off US dollar reliance and forging its own financial path forward.

So, you’ve got a bunch of moolah, and you’ve got a fear that it’s slowly getting worthless if it’s sitting dormant. So the best thing you can do with that cash is to spend it on opportunities that could deliver a sizeable return in the future.

That’s why Saudi has been getting heavily involved in sports of late. Everything from buying up the world’s most expensive footballers, to funding a competing golf tour to the PGA Tour – and then also looking to invest in the PGA Tour as well – through to, of course, investment into future technologies from renewable energies and more recently, artificial intelligence.

China is hellbent on becoming the dominant global leader when it comes to AI tech.

The US is hellbent on becoming the dominant global leader when it comes to AI tech.

But don’t completely discount the Saudis when it comes to being a significant global player in the arena of AI tech.

I wrote a few weeks ago about Sam Altman looking to raise $7 trillion to build semiconductor fabrication plants in Saudi’s smaller neighbour country, the UAE. Now it looks like Saudi Arabia is getting in on the action.

It’s claimed the kingdom is looking to pump around $40 billion from the PIF into a new fund specifically investing in AI technology.

For months now I’ve been explaining that regardless of market volatility, you need to watch where the money is flowing to see just how big and how long this AI boom will last.

Heads up, it will be a long time.

Another $40 billion form the PIF will go a long way to funding new opportunities, breakthrough companies, and maybe even supplementing the development of some of the already big and established players.

It might not be the same level as Altman’s search for $7 trillion, but $40 billion isn’t exactly a small chunk-o-change.

It’s further evidence that big money is still moving and flowing into AI. Even with the market now somewhat appreciative of where things are heading, my take is that investors still aren’t fully grasping how big and important this all is becoming.

$40 billion is a decent sign though that things are still only just warming up.

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

Boom 📈

• Veritone (NASDAQ:VERI) up 121%

• GuardForce AI (NASDAQ:GFAI) up 18%

• Alphabet (NASDAQ:GOOG) up 6%

Bust 📉

• BigBear.ai (NASDAQ:BBAI) down 7%

• C3.ai (NYSE:AI) down 8%

• AMD (NASDAQ:AMD) down 10%

From the hive mind 🧠

• As you’ll see below, the tech wars are back in full force. Which team you’re on will be interesting to see. But it looks like some are already picking sides (also probably because hoards of cash are being thrown at them too!).

• I’m fascinated with these bloody scrolls. And the fact that AI has been a key player in figuring out what they contain is literally, I think, the most awesome thing AI has been able to do to date. This is one of the most interesting reads I’ve had for a while.

• The headline you could make from this is The Sun-worthy. “Fat jabs help supercomputers to shed some weight” or “From fat jabs to far profits” or something like that. Yeah, I’m not great at headlines. But still, this is actually fat jabs leading to AI innovation and development, so that’s quite interesting anyway.

Artificial Polltelligence 🗳️

This week’s poll takes a look at whether you’re an “Apple person” or a “PC/Microsoft Person”.

As I wrote in Tuesday’s issue, the tech wars are back. This time it’s potentially Apple (with Google’s Gemini) vs. Microsoft’s Copilot (with just about everyone else).

And it reminded me of years gone by when you were either “Team Apple” or “Team Microsoft”.

A bit like political voting really… arguably more important though. And from my perspective, I’m a swing voter. I’ve been team Microsoft previously, and then defected, and defected back, and now I predominately run Apple gear. So I guess I’m team Apple… although I’m willing to defect back again because Copilot is so much better.

Anyway, my vote is unimportant, what team are you on?

Weirdest AI image of the day

Herbert the intellectual turtle gives a speech after winning the Nobel prize – r/Weirddalle

ChatGPT quote of the day

Thanks for reading, see you next week (and don’t forget to leave your comments below)

Sam Volkering

Editor-in-Chief

AI Collision

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