New Delhi:

The reason why you are able to ask ChatGPT “how to eat a mango without spilling it” and much more is Nvidia’s H100 and B200 Graphics Processing Units (GPUs). These magical chipsets that power AI chatbots have propelled Nvidia to become the frontrunners of the AI hardware industry, with market capitalization reaching the 3 trillion-dollar mark-more than Microsoft and Apple last month.

But now, a relatively young startup founded by two Harvard dropouts have set their eyes on their share of the AI hardware pie. Etched, the California based startup, is looking to disrupt the AI chipset market with their transformer ASIC (Application Specific Integrated Circuits) chip called Sohu.

Sohu claims to be 20 times faster in running transformers like ChatGPT than Nvidia’s flagship- H100. The B200, which is the more powerful Nvidia offering than H100, is reportedly 10 times slower then Sohu, according to the claims made by the company based on emulation tests.

Sohu is taking an entirely different approach to providing high computational power to run billions of parameters (Variables that are used in training an AI Model) for transformer models. Unlike GPUs that can do multiple computationally heavy tasks (like rendering graphics in real time), Etched is choosing to create a specialised chip that caters to only transformer AI models – ones that run ChatGPT, Sora (OpenAI’s text to video AI model) and Google’s Gemini.

What this means is it cannot run other AI models like Convolutional Neural Networks (used for image recognition). This opens up the possibility of exploring new AI products by developers that were till now not possible due to limited power on GPUs.

For example, Sohu can potentially lead to a real-time translator that can hear and read Hindi, Gujarati or Tamil and respond back in French, English and German. Of course, such multimodal and multilingual translation needs more than just the computational power, but in theory, it opens up the possibility.

Another multimodal application of transformers that the chipset might tap into is integrating visual and language areas. This essentially means that such a model will understand both text and images simultaneously, throwing open the possibility of visual questions and answers- like an interview.

But all of this remains a theory. Etched has raised 120 million USD on 25 June to make it a reality, with a real timeline as to an actual release of the Sohu ASIC remaining elusive.

Today we announced our $120M fundraise to bring Sohu to the world. Thanks @edludlow for hosting us! https://t.co/khzMPAofngpic.twitter.com/Q4SeuUjP2h

— Etched (@Etched) June 26, 2024

Etched has claimed it already has “tens of million dollars” worth of hardware reserved in preorders. The company has also secured a deal with TSMC (Taiwan Semiconductor Manufacturing Company) to fabricate the 4-nanometer chip, promising the deal is going to help “ramp up our first year of production.”

Taipei:

Taiwan Semiconductor Manufacturing Co, the main producer of advanced chips used in artificial intelligence applications, is expected to report a 30% rise in second-quarter profit on Thursday thanks to soaring demand.
The world’s largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from a surge towards AI that has pushed TSMC’s stock – and the broader Taiwan market – to record highs. Last week, its American Depositary Receipts topped a trillion-dollar market value.

TSMC is set to report a net profit of 236.1 billion Taiwan dollar (7.25 billion USD) for the quarter ended June 30, according to a LSEG SmartEstimate drawn from 20 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate.

That estimate compares to the 2023 second-quarter net profit of 181.8 billion Taiwan dollar.

TSMC last week reported a jump in second-quarter revenue, comfortably beating market expectations.

“I expect the third quarter outlook for all of their products to be very good,” said President Capital Management Co Chairman Li Fang-kuo.

TSMC, at its quarterly earnings call at 0600 GMT on Thursday, will update its outlook for the current quarter as well as for the full year, including its capital expenditure as it races to expand production.

TSMC is spending billions building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan.

On its last earnings call in April, TSMC maintained its guidance for capital spending this year at $28 billion to $32 billion, compared with last year’s $30.45 billion, and said 70% to 80% of that would go towards advanced technologies.

“TSMC could raise their capital spending,” said KGI Securities Investment Advisory Co Chairman Chu Yen-min. “There are many positive factors which will help their stock price and support the broader market.”

The AI boom has helped drive up the price of shares in Asia’s most valuable company, with TSMC’s Taipei-listed stock leaping 75% so far this year to historic highs, compared with a 33% gain for the broader market.

TSMC, colloquially referred to the “sacred mountain protecting the country” for its critical role in Taiwan’s export-dependent economy, faces little competition, though both Intel and Samsung are trying to challenge that dominance.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)