Auteur :
Helena Javitte Manager, Accuracy
Jean Barrère Partner, Accuracy
The emergence of generative AI presents a significant global challenge, catalysing considerable investment by major public and private players. Though foundation models such as those developed by OpenAI and Mistral are arousing great enthusiasm among the public and corporates alike, Sundar Pichai, CEO of Google, notes, ‘Chips and hardware represent the invisible infrastructure of the AI era, on which the whole of modern technology rests.’ His words highlight the critical importance of the underlying infrastructure, often eclipsed by the more visible applications of AI. Let’s investigate the key components of this value chain to untangle the knot of players, the economic dependencies and the geopolitical issues shaping the future of generative AI.
Let’s investigate the key components of this value chain to untangle the knot of players, the economic dependencies and the geopolitical issues shaping the future of generative AI.
CHIPS, AT THE HEART OF GENERATIVE AI AND A CRITICAL PIECE ON THE GEOPOLITICAL CHESSBOARD
The electronic chip is the fundamental component of generative artificial intelligence. Initially the fruit of technical wonders, it now represents an issue of global power and shapes global economic strategies.RAW MATERIALS, A POWERFUL LEVER FOR CHINA
China holds a dominant role in the supply of silicon and rare-earth elements, which are essential to the production of semiconductors. Controlling 85% of the rare earths processing market, the country uses its monopoly strategically to influence the global market, particularly in response to protectionist policies like those of the United States, which have seen restrictions placed on germanium and gallium exports.ASML AND EUROPEAN DOMINATION IN HIGH-PRECISION MACHINES
The Dutch company ASML reigns over the market for extreme ultraviolet (EUV) lithography machines, essential to etching circuits of less than 10 nm on microchips. Just one such machine is a veritable colossus, weighing some 150 tonnes, sent in 13 containers and then assembled by 250 engineers for at least six months! This technological monopoly places ASML at the centre of geopolitical debates, particularly as part of the import restrictions imposed by the United States on China, highlighting the crucial importance of these technologies in international relations.NVIDIA AND AMERICAN SUPREMACY IN CHIP DESIGN
Nvidia, the US giant, is at the forefront of the design of specialised chips (graphics processing units – GPUs), with innovations pushing artificial intelligence to new heights. In 2023, the company generated record revenues of $49 billion, testament to the fundamental impact of these technologies in the semiconductor sector and strengthening America’s position in global technological competition. The company’s latest innovation, the Blackwell platform, represents a leap forward in the calculating capacity for generative AI, capable of managing large language models with trillions of parameters with improved energy efficiency and considerably reduced costs. TSMC, THE TAIWANESE TITAN IN CHIP MANUFACTURING The CEO of Nvidia summarised the situation well: ‘THERE IS WATER, THERE IS AIR AND THERE IS TSMC.’ TSMC’s leadership in the manufacture of advanced microchips is undeniable. Controlling 90% of the market for 3 to 7 nm chips, TSMC symbolises Taiwan’s supremacy in this field. TSMC’s 3 nm manufacturing technology is particularly noteworthy and should generate more than 20% of the company’s revenues in 2024. Against this domination, the American Intel is making considerable investments to rival with TSMC, specifically more than $100 billion in the next five years to extend its manufacturing and research capacities in the US.THE VERTICAL INTEGRATION STRATEGY OF TECH GIANTS
Vertically integrated cloud companies – known as hyperscalers – like AWS, Google and Microsoft are Nvidia’s largest customers. The fact is that cloud infrastructure is at the heart of generative AI, providing the calculation and storage resources necessary to train, deploy and develop these intelligent systems. At the same time as shaping the development of the generative AI application ecosystem, these players are looking to move up the value chain and integrate the critical elements of their technological infrastructure.