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GPU Shortage 2023 - What's happened and how to be prepared

GPU Shortage 2023 - What’s happened and how to be prepared

What can we expect to happen over the next few months?

Unfortunately, much like the the great GPU shortage of 2020/2021 we find ourselves falling into a very similar situation. While the AI market is becoming larger than ever and major countries are looking to invest and regulate, there is a huge demand for graphics cards. 

We expect the Nvidia 4000 series cards availability to become extremely low and prices to spike. As Nvidias AI specific cards are becoming more unavailable and cannot keep up with the demand for AI projects, they will look to the Nvidia 4000 series to provide the power that these systems need. While Intel is still quite far away in the AI market, for the time being, it will be very hard to mitagate the ever growing market and demand.

Important news from top tech companies

Nvidia's AI business is prospering so much that the chipmaker can't satisfy the needs of all its customers. As a result, the Korean Economic Daily reports that Naver Corporation, the creator of Naver, South Korea's top search portal, has switched from Nvidia GPUs to Intel CPUs, citing AI GPU shortages and price hikes.

Naver Corporation, previously a loyal Nvidia customer, had utilized Nvidia GPUs to power the company's AI model that identifies false listings from real ones in the Naver Map software. The Nvidia GPUs were the cornerstone of the software, performing data processing, inference, and verification workloads.

While Nvidia's H100 (Hopper) GPU is selling like hotcakes around the globe, the chipmaker has so many orders that it has been challenging to build enough inventory for a steady supply. For example, the cost of Nvidia's AI accelerators in South Korea has skyrocketed to 80 million won ($59,121), representing a 100% price surge over the same model that initially sold for 40 million won ($29,561) at the beginning of the year. It's challenging to procure Nvidia's AI GPUs even if companies have the cash to spend on them. The lead time has increased to 52 weeks. In response, companies like Naver Corporation have started to look for alternative suppliers.

Naver Corporation has sought solace in the arms of Intel, turning back to CPUs rather than GPUs. GPUs are better for AI inference workloads, sometimes up to 10X faster than a CPU. However, Intel has made great strides with its latest Xeon processors, which have become a legitimate substitute for Nvidia GPUs. According to the Korean publication, Naver Corporation has tapped Intel's 4th Generation Xeon Sapphire Rapids chips for its AI servers. The South Korean tech giant had decided on Sapphire Rapids after a month of arduous testing.

Due to the hastening of the new export restrictions, Nvidia has to re-allocate up to $5 billion worth of AI and HPC GPUs. These GPUs were previously heading to the chipmaker's Chinese customers, including Alibaba, Baidu, and Byte Dance. Too bad it didn't happen sooner because it could have helped Nvidia keep Naver Corporation as its customer.

It's unknown how big of a customer Naver Corporation is to Nvidia. Analysts reportedly think that the Naver Corporation and Intel hookup could negatively impact Nvidia's market share in the global AI market, where the chipmaker seemingly possesses approximately 80% of the pie. Intel isn't the only company that's making moves, either. Rumors going back to May claim that Microsoft is allegedly joining forces with AMD to weaken Nvidia's grip over the AI market. Suffice it to say, extreme pricing on AI-focused GPUs will certainly push companies to look for more cost efficient alternatives as needed.

How can you prepare?

Of course as the going months go by it's going to be harder to purchase graphics cards and the prices will vary. We will be offering 48 hour quotes, so if you are looking for a Custom PC Build, it's best to get the order secured so we can allocate you the graphics card and the pricing before they change. 

If we have any issues regarding availablity we will let you know as soon as possible, but it may become hard to get specific models, so keep that in mind when you're looking for a new build.

Any questions or queries drop us an email at customerservice@directcomputers.co.uk 

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