Nvidia and OpenAI

A lot of people think Nvidia is dominant because they have the best hardware, but this isn’t exactly the case. When you look at the benchmarks, Nvidia is definitely ahead, but not by all that much. And there are benchmarks where Nvidia’s performance is matched or surpassed by competitors. So their hardware is better, but it’s not THAT much better.

The real reason for their success has to do with network effects. The AI software ecosystem is extremely optimized for using Nvidia hardware (especially around CUDA). But if you're a big company like OpenAI, you can create your own software ecosystem, so you don't really need to rely on Nvidia as much. That's why OpenAI is making deals left and right to reduce their dependence on Nvidia: if you're a big company, you don't want to be locked in to a single vendor and you can handle the costs associated with deviating from the gold standard. Nvidia essentially operates like a monopoly at the moment, but that could certainly change.

But for now, Nvidia is the most valuable company in the world, while OpenAI is worth only a measly $500 billion.