Chip race: Microsoft, Meta, Google, and Nvidia battle it out for AI chip supremacy

According to The Information, OpenAI is in discussion with Broadcom and other semiconductor designers about developing its own artificial intelligence chip to address shortages in its supply chain and reduce dependency on Nvidia. OpenAI has apparently also hired former Google chip staffers.

Bloomberg previously reported in January that OpenAI CEO Sam Altman was planning to raise billions of dollars to set up a network of chip factories.

The Finland-based Silo AI is described as the “largest private AI lab in Europe” and has provided AI solutions for companies like Phillps, Rolls-Royce, and Unilever. In addition to Silo AI, AMD also acquired the AI startup Nod.ai last year as it aims to keep up with the likes of Nvidia.

According to The Information, VC firm Andreessen Horowitz has secured thousands of AI chips, including Nvidia H100 GPUs, to dole out to its AI portfolio companies in exchange for equity. The initiative is aptly named Oxygen, because these chips are that integral to AI companies. The chips are almost impossible to secure for small startups too, because Big Tech companies hoover up all the supply.

Hey, remember the guy who’s responsible for funding WeWork’s delusional business plan? Softbank CEO Masayoshi Son is really into AI and he’s aiming to flood the area with money. His clearest targets are Nvidia chips and energy startups.

Bloomberg reports that Rain AI, which has OpenAI CEO Sam Altman as one of its backers, has hired Apple chip exec Jean-Didier Allegrucci to oversee the development of new AI processors that are supposed to reduce power consumption with “in-memory compute.”

Rain AI:

[Allegrucci] has worked and led silicon teams across a broad range of applications, including CPUs, GPUs, NPUs, ISPs, SoCs, and many others....At Apple, he oversaw the development of more than 30 SoCs used for flagship products, including iPhones, Macs, iPads, Apple Watch, and many more.

Riding a valuation pumped up by generative AI and its chips that power many of the tools, Nvidia’s market cap has passed not only Apple but now Microsoft, too, at more than $3.3 trillion, as reported by Bloomberg.

The markets are still open, but the rise has been fast — Nvidia shares are up 160 percent in 2024, passing $2 trillion in February.

The Ultra Accelerator Link (UALink) Promoter Group, will work to create an open standard to help AI accelerators “communicate more effectively” within data centers and boost performance. Other members include AMD, HP, Broadcom, and Cisco — but not Nvidia, which has AI chip-linking tech of its own.

Sales jumped 262 percent in Q1 2025 to hit a record $26B in revenue, of which nearly three-quarters ($19.4B) was data center compute — especially its Hopper GPUs for training LLMs and generative AI apps, says Nvidia. Gaming only accounted for $2.6 billion revenue this quarter.

Nvidia’s expecting record revenue again next quarter — $28B. Shovels in a gold rush, people.

CEO Sundar Pichai just announced new Trillium chips, coming later this year, that are 4.7 times faster than their predecessors, as Google competes with everyone else building new AI chips. Pichai also highlighted Axion, Google’s first ARM-based CPU, which the company announced last month.

Google will also be “one of the first” cloud companies to offer Nvidia’s Blackwell GPU starting in 2025.

Correction: Axion was announced last month, not last year. Also, corrected the spelling of Axion.

Apple — like Google, Meta, Microsoft, OpenAI and everyone else this side of Nvidia — is reportedly working on custom server hardware to power AI models as it prepares to introduce a slew of new features.

Over the past decade, Apple has emerged as a leading player designing chips for iPhones, iPads, Apple Watch and Mac computers. The server project, which is internally code-named Project ACDC—for Apple Chips in Data Center—will bring this talent to bear for the company’s servers, according to people familiar with the matter.

Apple watcher Mark Gurman followed up saying a similar-sounding project was canceled and it doesn’t make sense anyway: it would be too expensive, lack differentiation, and Apple prefers on-device AI.

Update: Added Gurman’s rebuttal.

AMD also says an AI PC refresh cycle will help PCs return to growth in 2024, and that 150 software vendors will be developing for AMD AI PCs by year’s end. The company’s top priority is ramping AI data center GPUs, though, which are “tight on supply.” New AI chips are coming “later this year into 2025,” too.

OpenAI’s Batch API now lets users upload a file of bulk queries to the AI model, like categorizing data or tagging images, with the understanding that they won’t need immediate attention. Promising results within 24 hours lets them run when there is unused compute power, and keeps those pricey GPUs humming around the clock.

Intel first introduced its Gaudi 3 AI accelerator last year, but now the company has revealed more details on performance. When compared to the H100 GPU, Intel says its Gaudi 3 accelerator can deliver “50% faster time-to-train on average across the Llama2 models” with better efficiency.

The company also says the Gaudi 3 AI Accelerator will be a “fraction of the cost” of Nvidia’s pricey H100. It will become available to companies like Dell, HPE, and Lenovo in the second quarter of this year.

Reuters reports the list could strengthen the Commerce Department’s existing restrictions on US tech shipments to Chinese chip factories. The US government has voiced national security concerns about letting China access US technology to grow its own capabilities.

US companies have complained it’s difficult to know which Chinese factories produce advance chips and are subject to the restrictions, Reuters says.

CNN gained entry into the training facility where TSMC teaches engineers to design and operate the machines that build semiconductors. The hope is to train engineers to “seed” factories it’s building in the US, Japan, and Germany.

TSMC told CNN that it needs “to hire thousands more” employees to staff facilities around the world as demand for advanced chips grows.

That’s what this NYT report says a16z and Saudi Arabia’s Public Investment Fund are considering, which may explain the rumors that Elon Musk (who denied them), Sam Altman, and others looking to the Middle East to fund their AI dreams.

It also recalls last fall’s news that the US government added an “additional licensing requirement” for Nvidia and AMD AI shipments to unspecified Middle Eastern countries.