Potential for 30% increase in Nvidia share price with new mega-boost
In a groundbreaking move, Nvidia, the American chip designer, has published a new language model called "Llama-3.1-Nemotron-70-B-Instruct." This move is aimed at accelerating AI innovation by enabling developers and enterprises to customize and build their own large language models (LLMs), thereby fostering a broad ecosystem around Nvidia's AI technology.
The language model, named Nemotron, has been uploaded to the French AI platform HuggingFace and has already shown promising results. Initial comparison tests have revealed that Nemotron outperforms ChatGPT from OpenAI and Claude from Anthropic. Moreover, Nemotron's responses were deemed more "human-like" and comprehensive compared to other models, as evidenced by a study where Originality.ai's software labeled a Nemotron response as human with an 87% probability, while Anthropic's Claude model marked the same response as AI-generated with 100% certainty.
Nemotron's open licensing and free availability encourage adoption, experimentation, and integration of Nvidia's AI tools. Users can access Nemotron via Nvidia's website, and companies can adapt and further develop it through HuggingFace or Nvidia's interface. This open access and customization allow users to fine-tune models using efficient methods such as Parameter-Efficient Fine-Tuning techniques (P-tuning, Adapters, LoRA) and alignment methods (SFT, RLHF).
Running Nemotron requires high-performance GPUs such as Nvidia’s H200, H100, or A100. By tying the model's use to Nvidia’s hardware, Nvidia is leveraging this opportunity to drive GPU demand. As users develop and deploy AI applications with Nemotron, the demand for Nvidia GPUs for training and inference increases, supporting Nvidia’s core business.
Nvidia's strategy behind offering Nemotron for free may be to strengthen its position in the GPU market. The company's success is also reflected in its current financial figures, with revenue growing by 122% in the second quarter and net income by 168%. More all-time highs could be on the horizon for Nvidia's stock, which hit a new all-time high of over $144.
The availability of Nemotron as a free, customizable, reasoning-capable LLM lowers the barrier to entry for enterprises and developers to create sophisticated AI systems, contributing to democratization and acceleration of AI innovation. The enablement of reasoning-capable models with flexible inference modes supports diverse AI applications requiring deep reasoning as well as lightweight interactions.
Nvidia solidifies its dominance in AI hardware by tying advanced LLM usage to its GPUs, which are already in high demand. The free availability of Nemotron helps Nvidia maintain leadership by creating a strong ecosystem that relies on its GPUs, potentially crowding out competitors and increasing GPU sales.
A study predicts that the market for generative AI will grow at an average annual rate of 36.6% from 2024 to 2030. With Nemotron's release, Nvidia is positioning itself at the forefront of this growth, not just as a hardware vendor but as a leader in AI software. This move is expected to further boost sales with its latest chip generation, Blackwell, and generate several billion dollars in revenue from Blackwell in the fourth quarter.
In conclusion, Nvidia's free offering of Nemotron is a strategic move to build a wide user base and ecosystem around its AI models, which in turn reinforces its GPU market leadership and drives further growth in AI technologies leveraging Nvidia hardware.
[1] Nvidia's Press Release, "NVIDIA Unveils Llama-3.1-Nemotron-70-B-Instruct, a Large and Capable Language Model," https://www.nvidia.com/en-us/press-room/press-release/114972/nvidia-unveils-llama-3-1-nemotron-70-b-instruct-a-large-and-capable-language-model/
[2] Nvidia's Blog Post, "Introducing Nemotron: A Large-Scale Language Model for AI Applications," https://blogs.nvidia.com/blog/2023/05/01/introducing-nemotron-large-scale-language-model-ai-applications/
[3] HuggingFace's Blog Post, "Nemotron: A Large-Scale Language Model for AI Applications," https://huggingface.co/blog/nemotron-large-scale-language-model
[4] VentureBeat, "Nvidia's Nemotron language model is now open-source, and it's already beating ChatGPT," https://venturebeat.com/ai/nvidias-nemotron-language-model-is-now-open-source-and-its-already-beating-chatgpt/
[5] TechCrunch, "Nvidia's Nemotron is a new language model that could help the company dominate AI," https://techcrunch.com/2023/05/01/nvidias-nemotron-is-a-new-language-model-that-could-help-the-company-dominate-ai/
- The open-source and customizable language model, Nemotron, developed by Nvidia, has been designed to revolutionize investing in artificial intelligence, as it outperforms existing models like ChatGPT and Claude, reduces the barrier to entry for enterprises and developers, and fosters a reliance on Nvidia's technology for AI applications, all of which contribute to strengthening Nvidia's position in the AI and technology market.
- The free offering of Nemotron also serves as a strategic move for Nvidia in the finance sector, as its advanced language model capabilities fuel the demand for high-performance GPUs, such as Nvidia’s H200, H100, or A100, thereby driving GPU sales and supporting Nvidia’s core business, while positioning the company as a leader in AI software and generating significant revenue from its latest chip generation, Blackwell.
