AI is in the rage right now, and every company seems to be branding its products with the AI tag to avoid getting left out of the AI hype. But, PC hardware and GPU manufacturers are doing something that’s even more troubling – ignoring the gaming hardware space to focus all their energies on serving the AI data center market. If this becomes the norm, gamers will find it hard to get excited about PC hardware ever again.
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Nvidia going all-in on data center GPUs
Being the dominant GPU manufacturer in the world, what Nvidia does shines a light on the broader graphics market as well. By now, you’re probably aware that Nvidia has become a $3 trillion company thanks to its massive data center profits.
It actually made over $22 billion in its latest quarter from selling GPUs to enterprise data centers, while gaming revenues brought in only around $2.5 billion. Two years ago, Nvidia’s gaming revenues actually exceeded its data center revenues. With the AI hype, those days are long behind us.
According to CEO Jensen Huang, Nvidia is now firmly focused on launching yearly GPU architectures for the data center market. As the company accelerates production to satisfy the growing AI demand, I can already see the next-gen gaming GPUs bringing only marginal improvements over the current-gen products. When it can allocate its silicon wafers to high-margin enterprise GPUs, why would it focus on gaming GPUs?
If the trends continue, we might stop buying high-end GPUs altogether in the near future.
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Sub-par Nvidia GPUs are already a thing
It’s not as if I’m spinning fantastical tales of a bleak future. We’ve already seen Nvidia launch crappy GPUs as a result of the growing insignificance of the gaming vertical in their balance sheet. The AI hype is truly real.
Take the RTX 4080 12GB, for instance. You might not remember this GPU because Nvidia had to “unlaunch” it hours after it received massive backlash from the community. It was touted to be just an RTX 4080 with 4GB less VRAM, but it was much closer to an RTX 4070. After unlaunching it, Nvidia later brought it back in the form of the RTX 4070 Ti (which is still not completely warranted).
More recently, Team Green launched the RTX 4060 Ti, a supposed successor to the RTX 3060 Ti, but it was barely faster and actually lagged behind the 3060 Ti in some games. The mediocre 8GB VRAM was a further blow to gamers. With the RTX 4000 cards, Nvidia has already bid goodbye to the budget segment. But with the next-gen RTX 5000 series, I fear even the mid-range segment will get the axe.
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AMD’s AI push and GPU forfeit
While Nvidia is busy becoming the number one AI chipmaker in the world, AMD is also working hard to position itself as the go-to company for high-performance processors for AI data centers.
AMD’s 4th Gen EPYC processors bring up to 128 cores of “epic” performance to data center workloads while its MI300 accelerators, powered by its professional CDNA 3 GPUs, are helping companies accelerate their generative AI capabilities. “Ryzen AI” hardware is already found in end-user devices like laptops and desktops.
Considering Team Red’s participation in the AI hype and the rumors that it’s planning not to compete at all in the high-end gaming GPU segment in 2024, it seems that AMD has reached the same conclusion as Nvidia – go where the money is. The potential AI revenues dwarf anything the gaming vertical can bring in, and even AMD is shifting its priorities.
This is especially worrisome for gamers as AMD’s RX 7000 series saw some of the most powerful GPUs ever go toe to toe with Nvidia’s overpriced behemoths like the RTX 4090 and RTX 4080.
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Lack of competition is bad for gamers
AMD bowing out of the high-end gaming GPU space can only mean bad things for gamers. Competition is always good for consumers, so with AMD seemingly not competing, Nvidia will have no incentive to innovate with its next-gen consumer GPUs. We’ll likely be seeing a lot more products like the RTX 4060 Ti. Plus, the company will be free to charge whatever it wants for its high-end RTX 5000 GPUs.
Advancing AI is crucial for the computing industry as a whole, but doing it at the expense of the gaming hardware industry is not acceptable. If companies like Nvidia and AMD continue to push the AI hype at the same pace, it’s possible that given enough time, the PC hardware market would become a shadow of its former self.
FYI: excited about the impact of AI on gaming? Here’s how AI in games will revolutionize the gaming industry.
There might still be hope for gamers
In the near future where Nvidia and AMD are focused on pushing the AI hype agenda, Intel might see a window to capture a bigger share of the PC hardware market. With both its 15th Gen Arrow Lake processors and second-generation Battlemage graphics cards, Team Blue could potentially create a new niche for itself – a solid alternative to Nvidia and AMD. I hope this will jolt them back to prioritize the gaming hardware space and start innovating on better products for gamers.
Image credit: Wikimedia Commons.
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