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Top Nvidia Alternatives For AI Exposure Amid Escalating US-China Tensions

No other technology has captured the attention and imagination of people in the 21st century than artificial intelligence. Technology remains the talk of the town in almost every corner of the world owing to its impact in various sectors, from tech to financial, agriculture, energy, and even healthcare. While the AI technology market was valued at about $69 billion in 2022, it is expected to balloon to over $1.8 trillion by 2028.

North America is one of the regions spearheading the expansion of AI technology, owing to the number of established and emerging companies working on various innovations. It also boils down to substantial involvement, with the region’s contribution expected to trigger an incremental growth of 56%. Likewise, it comes on the admission that technology will be at the center of various technological advancements in the healthcare sector, the auto industry, and the energy sector.

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Investment towards artificial intelligence is also on the rise, spearheaded by tech behemoths looking to get a piece of the growing pie. Microsoft has already invested over $13 billion in AI-powered chatbot pioneer OpenAI. The likes of Google, Amazon, Salesforce, and Apple are also investing in emerging AI startups as they look to gain access to valuable cutting-edge AI technologies capable of streamlining operations and fostering innovation.

Backed by a well-established tech industry, the United States remains well-positioned to dominate the expected AI growth. That’s because the country’s tech giants are setting aside billions of dollars for research and development expenditures on revolutionary technology. Nevertheless, China is still catching up, as it wants to be included as one of the superpowers owing to its AI technology capabilities.

China vs. the US on AI

As it stands, China has a way to catch up with the US in artificial intelligence. That’s because most leading Chinese companies are still benchmarking what the US companies do. Not so many Chinese companies can support their own large language model, given that the process of coming up with one is capital intensive.

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While the total funding in generative AI upstarts accounted for about $42.5 billion invested globally, $31 billion was spent on 1,151 deals on US companies. In contrast, only $2 billion was spent on 68 deals in China, a significant drop from $5.5 billion on 377 deals in 2022. The US can attract a significant chunk of the AI funding owing to being the leading destination for elite AI talent, at 57%, compared to China, at 12%.

While China is trying to accelerate the development of its chip industry and advanced artificial intelligence, US restrictions have restricted its efforts. Washington is limiting the exportation of high-end AI chips, terming them a matter of national security. In return, China has reacted with reports that it plans to ban US-made microprocessors on government computers.

The ongoing tussle between the US and China poses the most significant risk to the development of artificial intelligence technology. Regulations and bans over the sharing of sensitive cutting-edge technologies will likely trigger two parallel ecosystems for generative artificial intelligence.

Amid the headwinds, there is no denying the impact that artificial intelligence is expected to have on the global economy in the coming years. Shares of companies that enable AI, such as chip producers and those integrating the technology in their operations, exploding over the past 18 months is a testament that the technology is here to stay and will have a significant impact.

There is no denying that Nvidia has been on the news constantly owing to its value exploding, making it a trillion-dollar company amid the artificial intelligence frenzy. Unknown to most, it is one of many companies well-positioned to benefit from the artificial intelligence boom. Given that the technology is expected to impact economic productivity and growth significantly, several companies are already integrating it and are poised to be long-term winners.

Nvidia AI Alternatives

Alphabet

Alphabet is arguably one of the companies well-positioned to be a long-term winner amid the AI revolution. Its stock has rallied by over 40% over the past 12 months, outperforming the overall stock market. The tech giant’s outperformance comes from its significant AI investments as it looks to strengthen its Google Search and digital advertising business.

With billions of users on YouTube and Google, Alphabet has loads of user data that it is using to make its AI models smarter. In return, it’s been able to strengthen its search tool and enhance targeted advertising to attract more revenues.

SoundHound AI

SoundHound AI is one of the companies spearheading the artificial intelligence revolution and generating significant value. The company is making a name for itself in developing voice-based AI products, such as voice assistants, for use in industries with high customer traffic, such as restaurants and financial institutions.

In addition, the company is creating AI-powered products for the automotive and hospitality industries, which generate significant value. The company’s impressive client list, including Hyundai, Pandora, and Square, underscores its role in the AI push.

Super Micro Computer

Shares of Super Micro Computer have jumped by more than 800% over the past 12 months, affirming its edge as one of the biggest winners amid the AI boom. The company is making a name for itself in the development of servers and storage equipment for artificial intelligence purposes.

The company has emerged as a clear winner in the development of AI hardware, which explains the 100% plus increase in revenue in its fiscal second quarter. Management expects the growth rate to accelerate over the next two quarters by over 100% as demand for its hardware is stronger than the supply. The company has a close working relationship with Nvidia, with engineers from the two companies working together to design server systems.

Advanced Micro Devices

Advanced Micro Devices is one of the best Nvidia alternatives for anyone looking to gain exposure to semiconductor development. The company has made a name in developing chips for powering data centers, PCs, and gaming.

Likewise, it has unveiled the MX1300X AI GPU as it moves to take on Nvidia in the race for market share in the burgeoning AI technology market. The company’s revenues from the supply of chips for data centers increased by double-digit percentage points in the fourth quarter, affirming strong demand.

Likewise, the semiconductor giant has already inked strategic partnerships with Microsoft Meta and Oracle, which have indicated they would like to use its AI-powered chips to power their AI models.

Meta Platforms

There is every reason to be bullish about Meta Platforms as an artificial intelligence investment play. The social media giant is increasingly leveraging the technology in its apps to enhance the efficiency of its ads and, therefore, attract more advertising revenues.

Additionally, Meta Platform leverages artificial intelligence to enhance user experience through its social networking apps, including Facebook and Instagram, as one of the ways of improving engagement levels. With the push, the company can enhance targeted advertising and consequently draw in more revenues through various advertising campaigns.

SentinelOne

Amid the digital revolution, the demand for cybersecurity solutions has increased. One company at the heart of the frenzy is SentinelOne, which has also resorted to leveraging AI to enhance the effectiveness of detecting and addressing various cybersecurity issues.

The company proactively uses AI to hunt for viruses and other threats on devices and their networks. This advanced technology has earned the company accolades from various sectors for the effectiveness of its solutions.

Tesla

It is arguably one of the best investment plays amid the electric vehicle revolution in the auto industry. Additionally, it is emerging as an AI player as the company is increasingly leveraging the technology to enhance its self-driving technology.

With the company enjoying a head start on the development of EV cars, AI is well poised to strengthen its competitive edge on self-driving vehicles, consequently allowing it to attract more sales. Additionally, the company plans to use the technology to ramp up the development of cars, with plans to produce 20 million cars per day by 2030. The push is part of the company’s secret artificial intelligence project dubbed Optimus.

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