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This is the Big 3 - a look at the biggest topics in AI this week and why it affects your business.
This Week: Hugging Face Raise More $$ 😁 McKinsey on Generative AI and its impact, and of course….One Big Thing! (All Eyes on One Firm 👀 )
One Big Thing: All Eyes on NVIDIA
The entire AI world was waiting for the NVIDIA earnings call this week and it sure didn’t disappoint.
For a primer, NVIDIA and its graphics processing units (GPUs) have become central to the generative AI boom. Nvidia’s A100 and H100 AI chips are needed to build and run AI applications like OpenAI’s ChatGPT, and other services that take simple text queries and respond with conversational answers or images.
Why do these results matter?
Nvidia's data center business is booming. The company's revenue from its data center segment grew 171% year-over-year to $10.32 billion, driven by strong demand for AI chips from cloud service providers and large consumer internet companies.
The gaming division is also growing, but at a slower pace. Revenue from the gaming segment increased 22% year-over-year to $2.49 billion. This was below the company's guidance of $2.55 billion, but still represents strong growth.
Nvidia is investing heavily in future growth areas. The company is spending heavily on research and development, and is also making acquisitions to expand its reach into new markets. For example, Nvidia recently acquired Arm, a British chip designer, for $40 billion.
My Two Cents: Nvidia's investments in future growth areas are a sign of the company's confidence in its long-term prospects. Nvidia is betting that artificial intelligence, autonomous vehicles, and other emerging technologies will drive future growth. These are all high-growth markets, and Nvidia is well-positioned to capitalize on them.
2. Hugging Face Raises Millions from all the Big Players
AI startup Hugging Face announced a $235M Series D raise on Thursday, led by an all-star lineup of tech giants including Google, Amazon, Nvidia, Salesforce, and IBM.
Hugging Face, which creates tools for artificial intelligence developers to share and test their work openly, similar in spirit to GitHub for programming.
The company is named after the hugging face emoji — a smiley face framed by two open hands — and stems from the company’s origins making a chatbot app for iPhone.
Details include:
The platform provides tools for sharing and running open-source AI, as well as libraries and other tools for customizing systems.
Its currently hosting 500,000 different models and 250,000 data sets.
The round brings the company’s total valuation to a whopping $4.5B.
CEO Clem Delangue says he hopes to have 100M AI builders relying on Hugging Face in the next five years.
My Two Cents: As custom models continue to grow in each vertical and organization, Hugging Face and platforms like it to come will dominate the open-source sector.
3. McKinsey’s Report on Generative AI
I like to use this third slot to educate in some way about AI and/or how it’s working inside organizations.
So lets talk Generative AI. McKinsey calls it the next productivity frontier.
Generative AI’s moment is now according to the consulting giant - in a report published this summer.
Some critical highlights:
Massive value creation ahead. Generative AI could unlock $3-5 trillion annually across industries - this changes the game for AI's business impact.
B2C sectors set to gain most. Retail, banking, pharma - generative AI brings natural language capabilities to customer-facing roles. Huge potential here.
Automating knowledge work activities. Unlike prior waves, generative AI transforms white collar roles. Communication and expertise application see biggest lift.
Reskilling at speed and scale needed. With automation potential accelerated, we need to urgently retool and transition significant parts of the workforce.
Responsible adoption is a must. Alongside the optimism, we have to thoughtfully address risks around content quality, security, bias.
My Two Cents: It’s amazing what GPTs can do and it will be awesome to see how this evolves, in relatively short order. The generative AI wave is gathering pace rapidly. As business leaders and professionals, we must understand both its transformative power and responsibilities.
Talk next week and thanks,
Brad
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