Jensen Huang

And the reason for that is because ASICs is really fantastic when the market size is not very large.

It's easy to have somebody be a contractor to help you put the packaging of all that stuff together and do the manufacturing on your behalf.

And they charge you 50, 60 points of margin.

But when the market gets large for an ASIC, there's a new way of doing things called COT.

Customer-owned tooling.

And who would do something like that?

Apple's smartphone chip, the volume is so large, they would never go pay somebody else 50%, 60% gross margin to be in ASIC.

They do customer-owned tooling.

And so where will TPUs go when it becomes a large business?

Customer-owned tooling.

There's no question about it.

But there's a place for ASICs.

Video transcoders will never be too large.

SmartNICs will never be too large.

And so when there's 10, 12, 15 ASIC projects going on at an ASIC company, I'm not surprised by that.

Because there are probably five SmartNICs and four transcoders.

Are they all AI chips?

Of course not.

And if somebody were to build an embedding processor for a specific recommender system, and that was an ASIC, of course you could do that.

But would you do that as the fundamental compute engine for AI that's changing all the time?