I wrote about AI and what to expect in 2024 a few weeks back. I predicted that it would be a crazy and bullish year of AI advancement given what we had seen over the previous 14 months when ChatGPT was introduced. Little did I expect that within the last 2 weeks alone, there was so much mind-blowing AI news that I could hardly keep track…
The biggest explosion was reserved for Nvidia, which on Wednesday after market close announced spectacular financial results that exceeded everyone’s wildest expectations.
Its total revenue from a year ago rose 265%! Never had a large-cap stock (> $1 Trillion) ever achieved a 3x jump within a year! Net income during the quarter was $12.3 Billion ($4.93 per share) which was up 769% versus last year’s $1.4 B (57 cents per share). Year-on-year gain in earnings per share for its fiscal 4th quarter was up 486%! It expects the first quarter revenue of about $24 Billion, easily beating analyst estimates.
Nvidia’s share price jumped almost $100 overnight in the after-hours market from below $700 to almost hitting $800. It briefly touched the golden $2 Trillion market cap. The stock price rise added $277 Billion to make it the biggest one-day market cap addition in US history – see chart below. This makes Nvidia the world’s 4th most valuable company by market cap now.
Its Hopper H100 chips had a stranglehold on AI GPU that is so complete that demand has shot off the roof. The US even had to ban them from selling to China, terming it as a strategic asset to slow down China’s AI push. Ironically, all of the chip production is outsourced to 3rd party manufacturer TSMC, hence America’s strategic interest to “defend” Taiwan against China…
Analysts all over the world now have to remodel their price estimates given the quantum leap in financial results achieved within such a short time. There are no signs that its growth will slow down soon as AMD and Intel are beginning to try to compete. Nvidia already has more than 10 years of headstart in GPU development. AI wars are happening and all the big boys like Google and Meta are positioning to roll out their versions of AI urgently to stay one step ahead of each other.
Meanwhile, OpenAI fired a bazooka by previewing its latest text-to-video AI called Sora. The resulting videos created by using just a one-sentence prompt were amazing! They were so life-like that I swear that it could have been real… The humans and animals moved in such a way that it looks natural and I cannot tell that it is a deepfake. The way the snow lands on the puppies and the detailed creation of the surrounding environment of a crowded road blew my mind.
Google’s Bard was rebranded as Gemini. The top-of-the-line version is called Gemini 1.5 Pro. It also introduced new state-of-the-art Open Models based on Gemini called Gemma (7B and 2B configuration) while adding it to Workspace. Google tried to go full-on in its AI tools introduction but just got an earful about its Gemini AI image generator for being too “woke”. It refused to provide historically accurate racial profiling images due to its diversity settings and Google had to shut that down.
Then another company called GROQ (not to be mistaken for X’s AI chatbot called GROK) announced that they had turbocharged the speed of processing successfully. It outran the competition with blazing-fast chat responses, wowing everyone on the internet in the process.
Groq had developed a Language Processing Unit (LPU) which is an alternative to GPUs that is purpose-built for LLMs and token generation. It can reach speeds of 500 tokens per second. For comparison, GPT-3.5 can do 30-50 tokens per second. One can experiment and compare it with Meta’s Llama 2 (70B) or Hugging Face’s Mixtral 8x7B for comparison.
Will Groq give Nvidia’s GPU a run for their money now? I bet one of the AI big boys will be urgently trying to acquire Groq or seek collaboration at an obscene valuation any day now. The AI war is intensifying and shows no sign of slowing down at all.
Just a side story. The tech-heavy Magnificient 7 stocks consisting of Nvidia, Microsoft, Meta, Alphabet, Tesla, Apple and Amazon have single-handedly been responsible for the bulk of the market rally to date. They account for 75% of the S&P 500 gains this year! But Nvidia’s CEO Jensen Huang believes that AI has hit a tipping point, the beginning of a new evolution of growth? Hmmm….
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