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NVIDIA GETS ALMOST HALF ITS REVENUE FROM JUST 4 CUSTOMERS. HERE'S WHO THEY MIGHT
BE


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NVIDIA GETS ALMOST HALF ITS REVENUE FROM JUST 4 CUSTOMERS. HERE'S WHO THEY MIGHT
BE


SOME OF THE WORLD'S TOP TECH COMPANIES HAVE SPENT BILLIONS OF DOLLARS ON
NVIDIA'S AI CHIPS. ITS BIGGEST CUSTOMERS ARE ANONYMOUS IN FILINGS

By
Britney Nguyen
PublishedSeptember 23, 2024


We may earn a commission from links on this page.
Start Slideshow
Nvidia CEO Jensen Huang during the chipmaker’s GTC on March 18, 2024 in San
Jose, California.Photo: Justin Sullivan (Getty Images)

When Nvidia (NVDA) reported $30 billion in revenue in its second-quarter
earnings results, the AI chipmaker disclosed that almost half of that came from
only four customers.

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While the customers are anonymous in Nvidia’s 10-Q regulatory filing, “Customer
A” made up 14% of Nvidia’s revenue, while two customers made up 11%, and the
fourth made up 10%. Those sales — representing about 46% of its revenue, or
$13.8 billion — “were primarily attributable to the Compute & Networking
segment,” the company said.

“We have experienced periods where we receive a significant amount of our
revenue from a limited number of customers, and this trend may continue,” Nvidia
said in the filing.

Nvidia’s top buyers are likely to include Alphabet (GOOGL), Amazon (AMZN), Meta
(META), Microsoft (MSFT), and Tesla (TSLA) — major players in the generative
artificial intelligence boom. Even ChatGPT-maker OpenAI could be one.

Here’s what each of these companies, believed to be among Nvidia’s top
customers, are doing with its high-in-demand AI chips.

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ALPHABET

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ALPHABET

Google CEO Sundar Pichai at the Google I/O 2017 Conference on May 17, 2017 in
Mountain View, California. Photo: Justin Sullivan (Getty Images)

In July, Google-parent Alphabet reported sales of nearly $85 billion for the
second quarter — smashing Wall Street’s expectations by $840 million.

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“Our strong performance this quarter highlights ongoing strength in Search and
momentum in Cloud,” chief executive Sundar Pichai said in a statement.
Alphabet’s Cloud revenue surpassed $10 billion for the first time, while its
operating profit was over $1 billion.

“Our AI infrastructure and generative AI solutions for cloud customers have
already generated billions in revenues and are being used by more than 2 million
developers,” Pichai said.

And while AI Overviews, the AI search feature rolled out to Google Search in
May, initially went awry, generating wrong and even dangerous information,
Pichai said the company had made “great progress,” and increased engagement for
users between 18 and 24.

Google announced in July it was making its fastest, most cost-efficient model,
1.5 Flash, available in the unpaid version of its Gemini chatbot in over 40
languages and more than 230 countries and territories.

With 1.5 Flash, Gemini will have “quicker and more helpful responses,” Google
said, adding that users would notice improvements to Gemini’s reasoning and
image processing abilities.

In August, Google brought back Gemini’s ability to generate images of people,
after having to pause the feature in February, when users pointed out that
Gemini was generating historically inaccurate images of people, including
racially diverse Nazi-era German soldiers.

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AMAZON

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AMAZON

Amazon fulfillment center in North Las Vegas, Nevada.Photo: Ethan Miller (Getty
Images)

Months after Nvidia unveiled its next-generation, highly sought-after Blackwell
chips, Amazon Web Services, the largest cloud computing provider in the world,
“fully transitioned” its order of Nvidia’s Hopper chips for Blackwell because
the “window between Grace Hopper and Grace Blackwell was small,” the company
told The Financial Times.

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In April, Amazon chief executive Andy Jassy said in an annual letter to
shareholders the company is “optimistic that much of this world-changing AI will
be built on top of AWS.” While Amazon spent about $1.5 billion on Nvidia’s H100
chips in 2023, the company has also built its own chips: Trainium for training
its AI models, and Inferentia, a chip for inferencing.

Meanwhile, the company is reportedly working on an AI chatbot, internally called
“Metis,” to rival OpenAI’s ChatGPT. The chatbot will be accessible through a web
browser, and will be powered by one of the company’s internal AI models,
Olympus, Business Insider reported, citing unnamed people familiar with the
matter as well as an internal document. Olympus is reportedly more powerful than
Amazon’s publicly available AI model, Titan.

While Amazon changed the virtual assistant game when it launched Alexa in 2014,
the company’s new AI-powered Alexa is not even close to being ready, Fortune
reported, citing unnamed former employees. Amazon reportedly doesn’t have enough
data nor access to the chips needed to run the large language model (LLM)
powering the new version of its virtual assistant. It has also reportedly
deprioritized the AI-powered Alexa to focus on building generative AI for its
cloud computing unit, AWS.

However, an Amazon spokesperson told Quartz its former employees are incorrect
and uninformed on its current Alexa AI efforts, and that the Amazon Artificial
General Intelligence team has access to both in-house Trainium chips and Nvidia
graphics processing units, or GPUs.

In March, Amazon completed its $4 billion investment in AI startup Anthropic —
its largest investment in an outside company ever.

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META

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META

Mark Zuckerberg, CEO of Meta, testifies before the Senate Judiciary Committee on
January 31, 2024 in Washington, D.C. Photo: Alex Wong (Getty Images)

In July, Meta released its open-source Llama 3.1 models that it says are its
“most capable” to date. The largest model, Llama 3.1 405B, has 405 billion
parameters, or the variables a model learns from training data that guide its
behavior. Llama 3.1 405B rivals its closed-source competitors from OpenAI and
Google in “state-of-the-art capabilities,” including general knowledge, math,
and translating languages, Meta said. The release also included upgraded
versions of its 8B and 70B models, which were introduced in April.

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Meta said it trained the model with over 16,000 of Nvidia’s H100 GPUs, or
graphics processing units. Meanwhile, Nvidia announced an Nvidia AI Foundry
service for enterprises and nation states to build “supermodels” with Llama 3.1
405B.

Meta’s Llama models are used to power its AI chatbot, Meta AI, which is
available on Facebook, Instagram, and other platforms. Mark Zuckerberg, Meta’s
chief executive, told Bloomberg the company is working on Llama 4.

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MICROSOFT

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MICROSOFT

Microsoft chairman and CEO Satya Nadella at CES 2024 on January 9, 2024 in Las
Vegas, Nevada.Photo: Ethan Miller (Getty Images)

In September, Microsoft unveiled “the next wave” of its Copilot artificial
intelligence tools in its suite of work apps.

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The AI-powered features include Business Chat, which databases web data, work
data, and business data into a new tool called Copilot Pages, where human and
AI-generated data can be edited, added to, and shared between work teams.
Microsoft chief executive Satya Nadella said the new tool was part of his “daily
habit.”

Microsoft also launched Copilot in Excel with Python, making it possible to use
the programming language to work with data in Excel with natural language, not
coding. The new Copilot also includes AI-enabled features for Powerpoint,
Outlook, Word, OneDrive, and Teams, which Microsoft co-founder Bill Gates has
said he uses “a lot.” And the company introduced Copilot agents, or AI
assistants, that can be used to automate certain business tasks.

In March, Business Insider reported that some Microsoft customers were
complaining that Copilot was falling short of OpenAI’s ChatGPT. However,
employees said Microsoft 365 Copilot had mostly positive feedback, but some
customers using older versions of Microsoft’s suite of business tools were
expecting the more advanced Copilot to work with it, leading to the unfavorable
comparisons with ChatGPT.

In May, Microsoft announced Copilot Plus PCs, or its laptops equipped with AI
hardware and support for AI applications, that would be available from its major
laptop partners, including Dell (DELL) and HP (HPQ). The company said in May it
had released 30 “responsible AI” tools with over 100 features to support AI
applications developed by its customers on its Azure cloud computing platform.

Microsoft’s shares reached a record high in March after it announced its Copilot
for Security tool, which it called the AI industry’s “first generative AI
solution” for security and IT professionals; it’s trained on “large-scale data
and threat intelligence,” including over 78 trillion security signals that the
company processes daily, Microsoft said.


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TESLA

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TESLA

Tesla CEO Elon Musk at the official opening of the new Tesla electric car
manufacturing plant on March 22, 2022 near Gruenheide, Germany. Photo: Christian
Marquardt - Pool (Getty Images)

Tesla, which its founder and chief executive Elon Musk has touted as an AI
company, has worked on its Full Self-Driving (FSD) tech for years. The electric
vehicle company has been accused of exaggerating its driver-assistance system,
but in July, analysts said its latest update was encouraging.

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“There have been 90+ updates to the FSD system in the last four years, and fully
autonomous Teslas still don’t exist,” Alexander Potter, an analyst at Piper
Sandler, wrote. But “judging by user reviews on the X platform, version 12.5 is
revolutionary.”

In September, Tesla unveiled its Actually Smart Summon feature for its S3XY
electric vehicles. The feature allows Tesla owners to order their car to drive
to their location or another destination via the Tesla app. Another feature,
called Dumb Summon, allows owners to move their vehicle forward or backward
through the app.

Tesla also has a humanoid robot called Optimus in development, which it put on
display at China’s World Artificial Intelligence Conference in July. The
second-generation robot, which is not yet at full-scale production, is “capable
of performing tasks that are unsafe, repetitive or boring,” the company says. In
June, Musk claimed that robots will eventually power the company to a $30
trillion market cap.

Musk, who also founded an AI startup called xAI, announced in September that its
training cluster, called Colossus, is powered by 100,000 Nvidia H100 graphics
processing units, or GPUs, and is expected to double in size to 200,000 chips,
including 50,000 of Nvidia’s more powerful H200 chips, “in a few months.” In
July, he posted a poll on his social media platform X, asking if Tesla should
invest $5 billion in xAI, “assuming the valuation is set by several credible
outside investors.”

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OPENAI

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OPENAI

OpenAI CEO Sam Altman during OpenAI DevDay on November 6, 2023 in San Francisco,
California.Photo: Justin Sullivan (Getty Images)

When it released ChatGPT in November 2022, AI startup OpenAI kicked off the
current generative AI boom that has seen major tech companies, including its
partner, Microsoft, spend billions on Nvidia’s chips. Despite its startup
status, OpenAI is undoubtedly one of the leaders in the race, with its models
consistently outperforming those of its competitors.

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In September, OpenAI released its series of “reasoning models” that it said can
“think” through problems before responding — “much like a person would.” The
model series, which is available now as o1-preview through ChatGPT and the
company’s API, can handle more complex tasks and problems in science, coding,
and math than earlier OpenAI models. The company also announced OpenAI o1-mini,
a smaller and cheaper version of the new model, which can help developers with
coding tasks.

In May, the startup released a flagship model called GPT-4o, which it called a
step towards much more natural human-computer interaction.” The model can accept
combinations of text, audio, images, and videos, and generate combinations of
text, audio, and images, OpenAI said. The company added that the new model was
50% cheaper and twice as fast as its predecessor, GPT-4 turbo.

Sam Altman, OpenAI’s chief executive, said in March that he thought its GPT-4
model “kind of sucks.” However, he said ChatGPT-4o “feels like magic to me.”

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