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Forty-thousand dollars — that’s roughly the price of one Nvidia (NVDA) H100 GPU. And Big Tech needs millions of them.
Every quarter, Alphabet (GOOGL), Amazon (AMZN), Microsoft (MSFT), and Meta (META) are writing enormous checks to the same address in Santa Clara, Calif.
For a while, they had no choice. Nvidia had built the dominant chip architecture now deeply embedded in the AI research ecosystem. Nvidia’s market share in AI accelerators peaked around 90% in 2022 — 90% in an industry where 20% makes you a power player.
And Nvidia knew it. Its gross margins on AI chips ran somewhere between 75% and 80%. In other words, for every $40,000 chip sold, approximately $30,000 was pure profit. The cost to manufacture? Somewhere around $3,000 to $5,000.
