Data center processor revenue share numbers show a clear picture. NVIDIA has maintained strong growth for many years and currently leads the market. The primary question now is: What will be the new normal for data center market share in the future? A week ago we saw a chart from HPCGuru on Twitter, and it was pretty eye-catching.
The chart below shows the market share of data center processor revenue by quarter since Q2'19. It shows the collapse of Intel and the incredible rise of NVIDIA. Of course, the most eye-catching thing is the scale of NVIDIA's surge. In the most recent quarter, they held 73% of the market share. We know they're doing great, but as the saying goes, a picture is worth a thousand words, $14 billion a quarter.
In a reply to this thread, Ian Cutress asked a legitimate question: How much has the overall data center market grown during this time? The answer is that the market grew at a CAGR (compound annual growth rate) of 30% during this period - Intel shrank at 6%, AMD grew at 27%, and NVIDIA grew at 103% per year.
It is also clear from these data that NVIDIA’s truly astonishing growth came in the last year after ChatGPT stunned the world. However, if we exclude the past 12 months, their CAGR has reached 67%.
Let's try plotting this as a general scale graph and setting 2Q19 to 100, which is a convenient way to compare growth rates.
But NVIDIA's growth was so strong that it drowned out signals from all other companies. So we drew another chart without NVIDIA. This time, we add TSMC into the mix as another representative of market growth.
For those interested in recreating their own graphs, here is the raw data. Our data sources are company presentations, quarterly reports, and SEC filings. The focus is on data center segment revenue, but both Intel and AMD reclassified their data segments during this period, so the numbers for the earlier quarters are slightly different than those for recent quarters.
As for TSMC, we used the "HPC" segment report. They only started to break down the data in the second quarter of 19, which is also the starting point of our series of reports. Finally, it's worth noting that all of these segments include more than just CPUs and GPUs, as each company defines the segment a little differently. That could mean Intel's early revenue is overstated because it includes networking, memory and a number of other products. Therefore, their decline is not as steep as it appears. Still, the overall trend is clear.
We can draw two important conclusions from this. First of all, after years of hard work and a significant increase in share, AMD is still in a tepid third place in this market, with a share of less than 10%. They're still half the size of Intel, which isn't surprising, but stands out amid NVIDIA's rise.
The second, more important conclusion is that the market has now changed permanently. Again, this is something that everyone knows, but not everyone realizes. NVIDIA cannot maintain a 70% market share forever, but by the same token, Intel has had a 90% market share for more than ten years. While we've been talking about the rise of heterogeneous computing, now we're entering an era where NVIDIA becomes a common factor in the data center.
As excited as the tech world is about the bold future of AI, another way to understand the rise of large language models (LLMs) and AI is that the market is going through a cyclical shift. Just as the rise of Linux and Intel in the data center in the 1990s heralded a seismic shift in the market toward a new computing paradigm that we today call cloud computing, the rise of LLM appears to signal the rise of a new computing paradigm based on NVIDIA chips.
For the foreseeable future, the question is not "can Intel take back the data center throne? (No), but how dominant will NVIDIA be? Can they maintain 70% share? (Probably not), or is 50% the long-term status quo? (Most likely)."