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Major cloud providers and startups have limited access to semiconductors due to the surge in demand prompted by the AI boom. Therefore, Google is looking to capitalize on this demand by selling its chips to cloud customers. Why it matters: Although Google Cloud is the third-largest cloud provider globally by market share, it is not a leading semiconductor company. Data from CompaniesMarketCap.com reveals that Nvidia is the biggest semiconductor company in the U.S. Nvidia’s positioning as the leading chip producer may stifle Google’s potential in the semiconductor market, as many developers opt for Nvidia chips because the chipmaker’s proprietary software is widely used. In contrast, Google’s chips can only be used with its own customized software. The competition among cloud companies is also heating up; Microsoft recently announced that it has been developing its own AI chip, Athena, since 2019. What the numbers say: According to CompaniesMarketCap.com, the top three semiconductor companies in the U.S. by market capitalization in 2023 are Nvidia ($682B), Broadcom ($269.4B), and Texas Instruments ($165B). The 2019 Accenture Technology Vision report shows that nearly two-thirds of semiconductor executives expected AI to be the sector to have the greatest impact on their business over the next three years, and now these predictions appear to have come true. Brands that should care: Startups and software developers looking to capitalize on the AI craze and integrate AI into their products and services should keep track of the latest developments in the semiconductor industry, particularly those from cloud giants like Amazon Web Services (AWS), Microsoft, and Google Cloud, as they could help ease the ongoing chip shortage, but nothing is definite. At the present moment, major cloud service providers have put a restriction on the number of server chips customers can rent. |
What happened: Google has moved the TPU and TensorFlow teams, the