Microsoft, Meta, Intel announce AI initiative to take on Nvidia. What is it and why does it matter?

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Top technology companies including Meta, Microsoft, Advanced Micro Devices, Broadcom, Cisco Systems, Hewlett Packard Enterprise and Intel announced Thursday that they have developed a new industry standard called “Ultra Accelerator Link,” which is an attempt to establish communication between artificial intelligence accelerators, systems that help process the vast amounts of data used in AI-related tasks.

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In a statement, the companies said the purpose of the new effort is “industry specifications will be key to standardizing interfaces for AI and machine learning, HPC and cloud applications for next-generation AI data centers and deployments.”

“By building interconnects based on open standards, UALink enables system OEMs, IT professionals and system integrators to create a path to easier integration, greater flexibility and scalability for AI-connected data centers,” the statement further read.

Why are top AI companies creating new standards?

The move is seen as an attempt to challenge Nvidia's dominance in the AI ​​chip market, where the Jensen Huang-led company holds roughly 80% of the market share, which is a concern for major AI companies such as Microsoft and Meta.

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Notably, a Bloomberg report earlier this year also suggested that OpenAI CEO Sam Altman was in talks with multiple potential investors to create a chip manufacturing company capable of running the company's AI products, including ChatGPT and DALL-E.

OpenAI has reportedly not yet finalized its move and is discussing various options to solve the AI ​​chip shortage. OpenAI is also reportedly focusing on diversifying its suppliers beyond Nvidia and collaborating with other chipmakers.

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