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Chasing GPUs: The Tech Industry’s Quest for Compute Power

The excitement ignited by online chatbots like ChatGPT last year set off an A.I. wave in the tech industry, leading to an unprecedented demand for graphics processing units (GPUs). These GPUs are essential for powering the calculations required by cutting-edge A.I. companies to analyse vast amounts of data. As a result, a shortage of these critical chips emerged, leaving start-ups and investors scrambling to secure the coveted components.

Nvidia’s Dominance and Desperate Measures

Nvidia, a major player in the GPU market, holds a virtual monopoly on these chips. The company’s immense demand has propelled it to a valuation of $1 trillion, and is expected to report record financial results. While tech giants can more easily access GPUs due to their size and resources, start-ups and researchers are struggling due to long waitlists for cloud computing services. To counter this challenge, inventive approaches are being employed, including repurposing old gaming chips and sharing GPU clusters among start-ups.

Unconventional Strategies and Collaborative Efforts

Venture capital firms, like Index Ventures, are using their connections to purchase chips and offer them to their portfolio companies. Entrepreneurs are forming coalitions to buy and collectively utilise GPU resources. The scarcity of A.I. chips is particularly severe for nascent companies. To overcome this, creative measures such as diverting GPU resources from research and development or seeking government programs for chip access are being pursued.

Narrowing the Divide and Innovative Solutions

The quest for GPUs has created a distinct divide between tech companies equipped to secure these resources and those facing challenges. Initiatives like the San Francisco Compute Group have emerged to allow entrepreneurs and researchers to rent GPUs, bridging the gap for start-ups. Partnerships are forming to provide young portfolio companies with GPU access at no cost. This collaborative effort aims to level the playing field, ensuring that all players in the tech industry can harness the transformative power of GPUs.