The Six Five team discusses Google, NVIDIA, and Qualcomm’s spar on AI domination.
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Transcript:
Daniel Newman: So Google this week basically published some data on one of its artificial intelligence supercomputers, and they came out with a bit of a flash bomb saying it was more powerful and more efficient than competing NVIDIA systems. Just pause there. NVIDIA, 90% of the market. NVIDIA, pretty much the uncontested hardware winner of the generative AI boom, at least declaratively at this state –and a company by the way, that I was recommending on CNBC Squawk in the middle of July or August last year when it was literally down 70%. So I just want to be very upfront. I see the value, I believe in NVIDIA, but I am very interested in this kind of new architecture and posturing that’s going on in the market because right now you’ve got kind of a couple things that are going on.
You’ve got layers of abstraction, which is you’ve got hardware for AI and then you’ve got software for AI. And so nothing has been a more critical layer of abstraction for the mass adoption of powerful conversational generative AI than OpenAI and ChatGPT. This has brought it into the limelight. We’re seeing it embedded into software like Bing. You’ve seen it push the speed of innovation from companies like not only Microsoft, but Google, Adobe, and others at a breakneck pace. Well Pat, you and I love to say you can’t run this sh** on air. Oh no, I sweared. I sweared.
Patrick Moorhead: Oh no, we’re going to get the explicit now. Yes. Okay.
Daniel Newman: I’ve always wanted one of those. Or Connor, we can post prod, bleep that out. But you know what?
Patrick Moorhead: I don’t know. I feel good about myself if I don’t use F five times during an hour long conversation.
Daniel Newman: I’m passionate about this topic. So the bottom line here is what’s going on now is you’ve got a war going on among mega tech. You’ve got a war for who’s leading what. Of course we know, none of this runs without hardware. NVIDIA certainly a player, but companies like Google are developing hardware. Companies like AWS, which I recommended last week on TV as a semiconductor company are making hardware. And then of course you’ve got companies like Intel and AMD that are going to suddenly become very interesting because anytime a company has over 90% of a market, they become exposed, Pat…especially when they start competing with their biggest outlets like a cloud offering that’s going to compete with AWS and what they’re doing rather than working with. That’s a really interesting thing you pointed out and I thought was really interesting. We should talk more about that at some point.
My overall take Pat, this is mostly, this is remember with quantum supremacy and when Google and IBM and all them would kick back and forth, I feel like this is what we’re at right now. I do not feel like this really is that important except for the fact that all these companies want to let the world know and be very declarative that they’re in the game. And after Google got end-rounded by Microsoft a few weeks ago with the OpenAI thing, it absolutely got put on its heels and had to come out with Bard prematurely and that flopped, Google I think came back and said, no way, not again. We are not going to allow all the other companies to quietly be declared the winners of the AI race when there’s probably no company with a better data training set of data than Google.
I would argue there may not be a company that’s spent more on real R&D around AI than Google. And this to me is sort of a shot across the bowel to the whole industry that Google’s here to play. I think this will impact their cloud business. I think this is going to impact their overall business. And I think this is why I call it fluid, google does have a bigger role to play than they’re being given credit for today.
Patrick Moorhead: Yeah, it is fascinating and I think that Google’s move to call out NVIDIA had two planes on it. First of all, there was an investor plane which says, hey Google, if everybody’s using the same hardware as each other, how are you going to differentiate there? How are you going to lower costs? If you look at the entire generative AI revolution, it’s expensive. I think we’re looking at between 100 and 200 times the cost to do a search on GPT versus just standard index-based search. So there are cost elements to that. I think the other element, and I’m waiting for this shoe to drop here, is how that gets integrated into Google Cloud and the enterprise customers, and how does Google differentiate, let’s say, versus Tranium and Inferentia? Out there it looks like Azure is pretty tied up at least today, and not going to do their own inference or training hardware.
The one thing I wanted to point out, and it’s in the Kiron, it pierced Qualcomm, there was an MLPerf test that went out and, lo and behold, who shows up? Qualcomm. And what a great follow-up to our interview with Qualcomm CEO, Cristiano Amon at Mobile World Congress where we interviewed him and he talked about all of the investments that they’re making into Edge AI. And sometimes we forget that there is this Edge where you do inference. I mean, sure you can do that inside of the data center, you can do this on the Edge, but Qualcomm actually beat everybody in some power efficiency tests. So for instance, the amount of images per watt as an example. And if you think about it and the pressure that Boards of Directors are getting for the environmental elements of the business – that has to count for something. And I’m convinced more than ever that we will see Qualcomm in the data center or the data center Edge, and whether it’s the A100, the A200, if it takes 10 years to get into this market, Qualcomm is going to make a move.
And then when you connect that with what they’re doing on the client PC and the move they’re making inside of Windows, I think this clearly puts NVIDIA on the map if there were any doubters that Qualcomm should be put in the mix of potential people who can benefit big time from this. I think everybody knows that when it comes to premium Android smartphones, Qualcomm was going to make a major play here. I mean, they have a very high degree of market share, here. I don’t think that’s going to change anytime soon in the Android market. But when it comes to infrastructure AI, this was quite a move here and I almost, first of all, I was glad that Reuters picked up on this. Steven Ellis is a longtime reporter on chips. I’ve had some good relationships with him. So congrats on Qualcomm and as we always say on this show, competition is good. Competition drives innovation, competition keeps costs at a reasonable point.
Daniel Newman: Yeah, I think we hit that one and good call on adding Qualcomm to the discussion, company that I think will continue to surprise in the space. And we know the Edge is growing and becoming more and more critical, and we’re going to have to do more and more inference on the device. That’s also going to be an interesting inflection for the PCs, Pat, in the near future.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
