Why have a monopoly when a duopoly sounds so much nicer?

Posted on Tuesday, May 9, 2023 by Ned Bellavance

Featured in this episode of Chaos Lever

Who would have thought ten years ago that the most important and valuable chipmaker in the world would be Nvidia? I mean sure, gamers hellbent on maximizing resomolutions on their elite rigs might have thought so, but I don’t think the average enterprise IT person would have. Then we entered the era of big data and AI, and suddenly Nvidia, with their CUDA library and massive GPUs became a lot more interesting to the tune of a $720B market cap.

If there’s one thing the cloud hyperscalers don’t like, it’s paying other companies for hardware they could produce themselves, and to that end, Microsoft is reportedly partnering with AMD to “improve the capabilities of their GPUs”. The article from Bloomberg also alleges that this is somehow related to Microsoft’s AI accelerator Athena, although Microsoft denies it.

Basically, Microsoft is already running tens of thousands of Nvidia GPUs in Azure, and Nvidia has them over a barrel price-wise. It sure would be nice if they had a viable alternative to help curb Nvidia’s voracious appetite, and that alternative comes in the form of perennial runner-up AMD. Of course, don’t expect Microsoft to roll out thousands of AMD RTX workloads or pass the savings on to you. This is a leverage-play, pure and simple.