| 'ello, it's Mark in London. Nvidia is riding the AI wave to absurd heights. Its UK rival: not so much. But first... Today's must-reads: • AI leaders warn of a "risk of extinction"
• Fidelity values Twitter at a third of what Elon Musk paid
• The PC market is in decline If your company sells components designed for artificial intelligence services, now seems like it would be a wonderful time. It certainly is for Nvidia Corp. On Tuesday, the California company soared to a $1 trillion valuation for the first time, thanks largely to ferocious demand for its graphics processors from AI customers. Less so for Graphcore Ltd., a semiconductor startup that specializes in AI. The Bristol, England-based company is backed by more than $730 million of investment but so far hasn't come within striking distance of Nvidia. The lopsided rivalry is a sign that AI gains are, for the most part, going to the biggest tech companies. Even at this early stage in AI, the headliners are legacy names: Baidu Inc., Google, Microsoft Corp., Nvidia. The most noteworthy newcomer, OpenAI, is backed by a $10 billion commitment from Microsoft. Graphcore, too, had once banked on Microsoft, one of its signature investors, to be a big customer one day. But the Times of London reported last year that Microsoft declined to use Graphcore chips for its data centers, probably because Microsoft, like other big cloud providers, was developing its own AI chips. Here's what Graphcore aspires to do, according to a 2019 Bloomberg Businessweek story: Graphcore is developing a brain for computers that, if its co-founders are right, will be able to process information more like a human instead of faking it through massive feats of number crunching.
That year, Graphcore predicted revenue of $50 million. It ended 2021 with a little above $5 million in sales. Losses topped $183 million, according to its most recent financial disclosure. The startup's financials will be "in a similar spot" until next year, Chief Executive Officer Nigel Toon told me in late April. "We're still in low revenues, high burn. Developing the product, getting it to a point where it's just knock-it-out-of-the-park," he said. "Because we're dealing with a behemoth." The behemoth, Nvidia, produces the processor of choice for companies developing chatbots, image generators and other en vogue AI tools. Nvidia expects $11 billion in sales in the next quarter alone. There are several alternatives on the market, but few are poised to displace Nvidia or eat into its market share, according to Alan Priestley, an analyst at Gartner. "It's just the default option," he said. Toon sees great potential in China, a market where Nvidia has been hamstrung by politics. Toon estimated that at least 10 Chinese companies are working on large-language models, he said after a trip to Beijing in April. Nvidia is barred from selling its highest-end graphics processors in the country. "We're one of the few alternatives," he said. Graphcore has been "quite successful" in China and other parts of Asia, Toon said, but beyond partnerships with Alibaba Group Holding Ltd. and Baidu, the company hasn't cited any specific customers. Graphcore's own investors are reportedly skeptical. This year, Sequoia Capital wrote down its internal valuation of the startup to zero, according to the Times of London. Sequoia declined to comment. Toon downplayed the report. "It really doesn't matter because we've got cash," Toon told me. "There's an enormous opportunity ahead of us." Yet, Toon seems to recognize the gravity of Nvidia's advantage, and Graphcore has been appealing to antitrust concerns. In a March letter to UK officials, Toon warned of Nvidia's "dominant market share." He told the Financial Times that Europe is at risk of "heading to a world of tech colonization" by US firms. —Mark Bergen The murder case of Bob Lee that has captured the attention of San Francisco got a little more curious. The lawyer representing his accused killer has quit.  Watch the Bloomberg Technology TV interview with Sasha Luccioni, research scientist at Hugging Face, on the controversial AI extinction memo. The US Supreme Court turned away an appeal in a sex trafficking case against Reddit. Excitement around AI could jumpstart a sleepy IPO market. Just not yet. Bumble President Tariq Shaukat stepped down, and the dating app maker will search for his replacement. | 
No comments:
Post a Comment