Semiconductor Chip Manufacturing Giant Nvidia Believes Cryptocurrencies Do Not Benefit Society

Even if the US chipmaker Nvidia’s potent processors are sold in vast amounts to the industry, the corporation has claimed that cryptocurrencies do not “deliver anything good for society.”

Other applications of computing power, such the artificial intelligence chatbot ChatGPT, are more beneficial than mining cryptocurrency, according to the company’s chief technology officer, Michael Kagan.

Nvidia never extended a warm welcome to the cryptocurrency community. In order to make sure supplies went to its favoured clients instead, which include AI researchers and gamers, the company even produced software in 2021 that artificially restricted the ability to utilize its graphics cards for mining the well-known Ethereum cryptocurrency.

Given the minimal utility of employing computing power to mine bitcoins, according to Kagan, the decision was reasonable.

Around 10,000 Nvidia graphics cards made up a supercomputer used to train the first iteration of ChatGPT.

“All this crypto stuff, it needed parallel processing, and [Nvidia] is the best, so people just programmed it to use for this purpose. They bought a lot of stuff, and then eventually it collapsed, because it doesn’t bring anything useful for society. AI does,” Kagan told the Guardian.

“With ChatGPT, everybody can now create his own machine, his own programme: you just tell it what to do, and it will. And if it doesn’t work the way you want it to, you tell it ‘I want something different’.”

Contrarily, high-frequency trading, a sector that brought in a lot of business for Mellanox, the company Kagan established before it was acquired by Nvidia, was more like cryptocurrency.

“We were heavily involved in also trading: people on Wall Street were buying our stuff to save a few nanoseconds on the wire, the banks were doing crazy things like pulling the fibres under the Hudson taut to make them a little big shorter, to save a few nanoseconds between their datacentre and the stock exchange,” he said.

“I never believed that [crypto] is something that will do something good for humanity. You know, people do crazy things, but they buy your stuff, you sell them stuff. But you don’t redirect the company to support whatever it is.”

It was almost by accident that Nvidia’s products found their place at the center of the AI boom given that the company was previously best known for making potent graphics cards for PC gamers to play the newest games.

The basic yet powerful processors that gamers had adopted happened to operate substantially faster on the computationally difficult work of training a new AI system, which may require millions or billions of dollars’ worth of computer power.

Microsoft announced two weeks ago that it had purchased thousands of Nvidia’s A100 GPU AI-focused processors to support OpenAI’s workload. For its AWS cloud computing service, Amazon has purchased 20,000 H100s from Nvidia, while another 16,000 have been purchased by Oracle. 

With its DGX cloud service, which starts at little under $37,000 per month for just eight H100s connected in a “cluster,” Nvidia also rents access to the chips directly.

Nvidia’s CEO, Jensen Huang, said the company is the driving force behind “the iPhone moment of AI” and that the “generative AI” his company powers will “reinvent practically every industry” in remarks made last week at the company’s annual conference.

Due to regulatory issues, Nvidia’s $40 billion acquisition of the UK-based technology company Arm last year failed.

(Adapted from

Categories: Economy & Finance, Entrepreneurship, Regulations & Legal, Strategy, Sustainability, Uncategorized

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