Nvidia (NASDAQ: NVDA) currently dominates the market for artificial intelligence (AI) accelerators, with a market share that some estimates put above 90%. The company's AI chips are expensive, but customers have been willing to pay up to participate in the AI revolution.

(NASDAQ: INTC) will launch the third generation of its Gaudi AI accelerators later this year. The company had a backlog of about $2 billion related to AI chips a few months ago, although it only expects to generate about $500 million in Gaudi 3 sales in 2024. The slow ramp-up may be due to supply constraints.

Nvidia's head start and the mature software ecosystem around its AI chips will make it tough to beat. Intel is working with other industry players to standardize an alternative to Nvidia's proprietary CUDA platform, although that effort will take time. The second prong in Intel's AI strategy is to offer prospective customers significant cost savings compared to Nvidia's solutions.

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Source Fool.com