The first question Nvidia<\/a> CEO Jensen Huang had to answer at the AI chipmaker’s annual shareholder meeting on Wednesday was how Nvidia handles rising competition.<\/p>\n Though Nvidia indisputably leads the AI chip market, with more than 80%<\/a> of market share, competition has intensified. Established tech giants like Intel<\/a> and AMD<\/a> and rising startups like Etched<\/a>, Cerebras<\/a>, and D-Matrix<\/a> are all vying for room in a highly lucrative space worth billions<\/a>.<\/p>\n About 40% of Nvidia’s revenue is believed<\/a> to come from just four companies: Microsoft, Meta, Amazon, and Alphabet. All of those companies have the means to fully develop AI chips on their own one day.<\/p>\n Related: <\/b>Nvidia Long-Term Employees ‘Semi-Retired’ Multimillionaires<\/b><\/a><\/p>\n So Nvidia’s current customers could one day be its biggest competitors.<\/p>\n Huang addressed the threat of competition without calling out any rival in particular on Wednesday. In response to a shareholder question, he said Nvidia’s strategy was to make AI chips that have the “lowest total cost of ownership.”<\/p>\n Those five words don’t necessarily mean that Nvidia’s chips, which cost<\/a> upwards of $30,000 apiece, are the cheapest<\/a> on the market.<\/p>\n Instead, Nvidia’s chips could present a “lowest total cost” overall when potential customers consider performance, the cost of running the chips, and their wider reach.<\/p>\n “The NVIDIA platform is broadly available through every major cloud provider and computer maker, creating a large and attractive install base for developers and customers, which makes our platform more valuable to our customers,” Huang said, per CNBC<\/a>.<\/p>\n Nvidia’s chips have been around for 30 years, but until recently, they were used as graphics cards<\/a>.<\/p>\n Huang believed that the chips could do more. In 2016, he asked his team to use the chips to build an AI server, which ended up<\/a> being as big as a briefcase and cost $129,000 to make. He then hand-delivered the server to OpenAI as a gift.<\/p>\n Tens of thousands of Nvidia’s chips now power<\/a> OpenAI’s ChatGPT.<\/p>\n Huang emphasized at the meeting that Nvidia had a head start on AI chips because it started investing in the technology a decade ago, pouring billions of dollars into the effort and adding thousands of engineers to work on it.<\/p>\n That first-mover advantage has paid off. Nvidia is now one of the world’s most valuable<\/a> companies, hitting a $3.338 trillion valuation last week.<\/p>\n Related: <\/b>Amazon Joins Apple, Nvidia, Microsoft, Alphabet in $2T Club<\/b><\/a><\/p>\n<\/p><\/div>\n![\"\"](\"https:\/\/assets.entrepreneur.com\/images\/misc\/1719509229_Jensen-Huang-GettyImages-2155110536.jpg?width=1000\")
Nvidia CEO Jensen Huang. (Photo by SAM YEH\/AFP via Getty Images)<\/sup><\/i><\/p>\n