Core Viewpoint - Nvidia has become the first publicly traded company to surpass a market capitalization of $4 trillion, achieving this milestone in just over two years since reaching $1 trillion, highlighting the rapid growth in the AI sector and the dominance of computing power [4][5]. Group 1: Nvidia's Market Position - Nvidia's market value growth is one of the fastest in Wall Street history, emphasizing the importance of computing power in the AI era [5]. - Despite Nvidia's success, competition is increasing as major cloud service providers like Google, Amazon, and Microsoft are developing their own ASIC chips while using Nvidia's GPUs [5][21]. - Nvidia's GPUs currently dominate over 80% of the AI server market, while ASICs account for only 8% to 11% [21]. Group 2: ASIC Market Dynamics - The growth of ASICs is a response to changing industry demands rather than a cause, with ASICs being tailored for specific applications in AI [12][13]. - As AI model development progresses, the demand for ASICs is expected to rise, complementing the existing GPU market rather than replacing it [19][20]. - The rapid growth of ASICs indicates a significant maturation of application-side demand in North America, driven by the explosion of AI token usage [19]. Group 3: Competitive Strategies - Nvidia's recent introduction of NVLink Fusion allows for the integration of Nvidia GPUs with third-party CPUs or custom AI accelerators, breaking down previous hardware ecosystem barriers [23][25]. - This semi-open NVLink Fusion strategy is seen as a defensive move against ASIC competitors while maintaining Nvidia's ecosystem advantages [25][28]. - The emergence of UALink, initiated by major tech companies, aims for higher openness compared to Nvidia's NVLink, but is still in the early stages of development [27][28].

Core Viewpoint - Major cloud service providers and Nvidia's clients are beginning a long "divorce" process, focusing on developing their own ASIC chips to reduce dependence on Nvidia's expensive hardware and software ecosystem [1][2]. Group 1: Market Trends - The procurement of Application-Specific Integrated Circuits (ASICs) is expected to grow at a compound annual growth rate (CAGR) of 50%, primarily driven by companies like Microsoft, Google, and Amazon AWS [1]. - Nvidia's hardware, particularly the Blackwell architecture B200 GPU, is widely used in data centers, but its high cost (ranging from $70,000 to $80,000 per chip) is prompting clients to seek alternatives [1]. Group 2: Client Strategies - Core cloud computing clients of Nvidia are increasing their orders for ASIC hardware while still purchasing Nvidia products, indicating a gradual shift towards hardware autonomy [2]. - Companies like Amazon and Google are heavily investing in self-developed chips, with Amazon reportedly running about 50% of its new servers on its AWS Graviton Arm processor family [3]. Group 3: Industry Dynamics - Nvidia is forming partnerships with various ASIC manufacturers through its NVLink Fusion program, allowing seamless collaboration between Nvidia hardware and third-party ASIC servers [3]. - TSMC, as a major foundry for both Nvidia's hardware and the ASIC chips of large cloud clients, is positioned to benefit significantly from this trend [3].