Nvidia Places Its Bets on Virtual Reality and Artificial Intelligence

April 5, 2016, 9:32 PM UTC
Inside The 2016 Consumer Electronics Show
Jen-Hsun Huang, chief executive officer of Nvidia Corp., speaks during the 2016 Consumer Electronics Show (CES) in Las Vegas, Nevada, U.S., on Monday, Jan. 4, 2016
Patrick T. Fallon/Bloomberg/Getty Images

Nvidia is betting that its computer graphics smarts will help it make a name for itself in virtual reality and artificial intelligence.

On Tuesday, Nvidia CEO Jen-Hsun Huang explained how the chip-maker plans to capitalize on the hot technologies, which he said have both experienced significant advancements in recent years.

With new virtual reality headsets from Facebook (FB) and HTC (HTC) finally available to buy, analysts expect steady growth over the next few years as these new technologies mature in the marketplace. At the same time, advancements in artificial intelligence have made it possible for companies to train thousands of computers to better recognize images and speech to make decisions more quickly than just a decade ago.

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Huang explained during Nvidia’s (NVDA) annual hardware conference in San Jose how the company’s graphics processing units are used to power both AI and VR, and announced new products aimed at companies looking to build upon those technologies.

He detailed a new video rendering technology called Iray VR, which he said will improve the way 360 degree video displays on virtual reality headsets. Professionals ranging from architects to auto makers will be able use the technology, available in June, to create photo-realistic designs more quickly. This will help in rendering 360 degree imagery like building interiors and car models on virtual reality headsets.

“This is no different than Pixar rendering a film,” Huang said.

Huang also explained how Nvidia is working with NASA and the media company Fusion on an upcoming virtual reality recreation of the planet Mars’ surface.

During Huang’s speech, Apple (AAPL) co-founder Steve Wozniak appeared on a big screen to show off how he, wearing an HTC Vive VR headset, was able to virtually visit the red, barren landscape of Mars while driving a rover.

Apple co-founder Steve Wozniak experiencing Mars in virtual reality during Nvidia event.

Huang then turned his attention to artificial intelligence, detailing a new GPU designed specifically for the task of deep learning, which companies like Google and Facebook have popularized in recent years through their experiments in training computers to recognize objects like cats within images.

Big cloud computing companies like Microsoft (MSFT) and Google (GOOG) will get access to the new GPU first, followed by business technology giants like Dell and Hewlett-Packard Enterprise (HPE), that will roll out servers based on the GPUs by the first quarter of 2017, Huang said.

For companies that don’t want to wait until the servers come out or don’t want to use a cloud provider for their deep learning experiments, Nvidia will also sell a supercomputer that Huang said has the power of “250 servers in a box.” As of now, only select universities like MIT, University of California, Berkeley, and Stanford will have access to the supercomputers. The machine will cost a hefty $129,000 when it hits the market in June, said Huang.

Curiously, Huang said little about new video games being developed to take advantage of its graphics chips. Nvidia generally leads other chip-makers like AMD (AMD) and Intel (INTC) when it comes to selling graphics chips that suit the needs of gamers.

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Judging from Huang’s speech, it’s clear the company believes that it’s not just video game fanatics that will be big drivers of company sales for the future. The company believes that as VR gains more steam, more professionals will be inclined to use the technology. Additionally, Nvidia is hoping that it’s AI-tailored chips will give it an advantage in the data center market, in which Intel currently dominates.

Still, Nvidia has a long way to go to catch up with Intel.

Intel’s data center business alone made $4.31 billion in its fourth quarter, while Nvidia’s data center tailored-chips took in $97 million sales for the company’s fourth quarter.

But if more companies decide that Nvidia is the way to go when it comes to artificial intelligence, and analysts say it’s still early in business adoption, there’s a lot of room in the market for Nvidia to potentially grab.

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