The report did not specify if the chip design unit will focus solely on AI accelerators or also develop other types of processors. Expanding into other processor types could unlock additional revenue opportunities for Nvidia. This move could create more competition for incumbent players like Marvel, which has delivered over 2,000 custom processors for customers in the past two and a half decades.
Key takeaways:
- Nvidia Corp. is reportedly forming a new business unit to develop custom chip designs for cloud providers and other customers, aiming to establish a bigger presence in the $30 billion market.
- The chip design unit is part of an effort to protect Nvidia as companies search for alternatives to its products, potentially generating revenue through chip design fees and licensing income.
- Nvidia's entry into the chip design market could create more competition for incumbent players such as Marvel Technology Inc. and Advanced Micro Devices Inc.
- It's unclear whether the company’s chip design unit will focus exclusively on AI accelerators or will also develop other types of processors, which could unlock additional revenue opportunities for Nvidia.