With competition heating up in the artificial intelligence (AI) chip market, ARK was invited to present on the state of AI hardware at CogX 2019. Here we share a summary of our talking points and we invite you to watch the full presentation below.
ARK’s research shows that more than 60 companies worldwide are in advanced stages of either building or selling specialized processors to accelerate AI applications. Unlike the first silicon boom centered in the Bay Area, this new wave of chip development spans the US, China, Europe, and Israel. In total, venture capital firms have invested more than $2.6 billion across 40 startups.1 Three key themes stood out this year:
- Given its large video analytics market and its “Made in China 2025” initiative, China is a leading market for AI chip development. In 2018, venture investments in AI chip companies in China eclipsed those in the US.2
- Vertical integration increasingly is the norm among hyperscale cloud companies and specialized consumer tech companies. Amazon, Google, Apple, Tesla, and Baidu all are developing their own in-house silicon to accelerate performance and reduce costs. As a result, the addressable market for AI chip vendors like Nvidia and Intel is shrinking.3
- Optical computing is making a comeback in the form of AI chips. Companies such as Lightmatter and LightOn are performing matrix-multiplication substantially faster with more power efficiency on lasers than on semiconductors. Cloud data centers are evaluating this hardware in its early days.4
- ARK Investment Management LLC, 2019 ↩
- Source: DARPA ERI Summit 2018: Next Wave of Electronics-Driven Applications Dr. Walden Rhines, Chief Executive Officer, Mentor Graphics, https://www.youtube.com/watch?v=V2IOiISHA3g ↩
- ARK Investment Management LLC, 2019 based on company reports. ↩
- ARK Investment Management LLC, 2019 based on company reports, https://lightmatter.co/ and https://www.lighton.ai/ ↩
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