According to reports, Nvidia is constructing a new business segment devoted to creating custom chips for cloud computing companies and others, including sophisticated artificial intelligence processors.

The leading worldwide manufacturer and supplier of AI chips wants to secure a piece of the rapidly expanding custom AI chip market and defend itself against the increasing number of businesses looking to find alternatives to its goods.

The business, situated in Santa Clara, California, presently has roughly 80 percent of the market for high-end artificial intelligence processors. Because of this dominance, its market valuation has increased by 40 percent this year to $1.73 trillion, following a more than threefold increase in 2023.

Many of its big customers, including as Microsoft, Alphabet, Meta Platforms, and OpenAI, the company that created ChatGPT, have rushed to adopt its products. Nvidia's H100 and A100 chips serve as an all-purpose, general-purpose AI processor for these customers. However, for certain purposes, IT corporations have begun to design their own internal processors. By doing this, you can potentially cut down on energy consumption as well as design time and expense.

According to reports, Nvidia is currently making an effort to assist these companies in creating unique AI chips that have been transferred to rival companies like Marvell Technology and Broadcom.

Greg Reichow, general partner at venture capital firm Eclipse Ventures says, “If you're really trying to optimize on things like power, or optimize on cost for your application, you can't afford to go drop an H100 or A100 in there. You want to have the exact right mixture of compute and just the kind of compute that you need."