- $4 has loaded up on Nvidia GPUs for X, xAI, and Tesla.
- Meanwhile, Chinese tech titans are reportedly scrambling to buy $5 billion worth of the chips.
It seems like everyone and anyone wants to snap up $4's semiconductor chips these days.
Sales of the company's graphic processing units (GPUs) have surged since $4, propelling it to a stellar first-quarter earnings performance and $4 in May.
But there are signs emerging that there may not be enough of Nvidia's chips to go around, with multiple top executives warning that demand is massively outpacing supply.
Soaring demand
The massive increase in interest in artificial intelligence has been a key factor driving demand for Nvidia's semiconductors.
AI products like ChatGPT are powered by large computers. Those run on specialized GPUs – and Nvidia has a 95% share of that market, per data from New Street Research.
On Thursday, the $4 reported four Chinese tech giants ramping up their AI efforts had ordered $4amid growing fears that the Biden administration will restrict their access to US exports.
Elon Musk is also a fan – he's been buying thousands of the chips for his generative AI project xAI, $4 reported back in April, and he confirmed that "$4" the same month.
Perhaps the strongest sign that demand for Nvidia's chips is soaring came in May, when it released stellar second-quarter revenue forecasts that smashed Wall Street's expectations by 50%.
Those results fueled a 24% share-price surge on May 25, adding about $190 billion to the tech giant's total market value in a single day.
Dwindling supply?
But there are signs that Nvidia might not be able to produce enough GPUs to keep up.
"I think it's not controversial at all to say that, at least in the short term, demand is outstripping supply, and that's true for everybody," $4 Web Services CEO Adam Selipsky told $4 Tuesday, referring to the high-end H100 chips that are needed to train AI models.
Meanwhile, Cloudflare CEO Matthew Prince acknowledged there's been "a lot of constraint in getting" the H100s on a second-quarter earnings call earlier this month, while cloud service provider $4's CTO said in an interview with $4 that the chips could be sold out until next year.
As Insider reported in June, Nvidia GPUs are already in such short supply and so expensive that $4 for their portfolio companies.
So while it's unquestionable that Nvidia's chip business is booming, the next challenge for the newly-minted member of the so-called $4 might be keeping up with that explosion in demand.