How rapid AI advancement is driving users to the cloud

The relentless pace of advancement in artificial intelligence (AI) has sparked an unprecedented arms race in chip development. NVIDIA's recent announcement at ComputeX 2024 of their upcoming Rubin architecture GPUs, slated for a 2026 release, is just the latest in this escalating battle.

With NVIDIA's Blackwell and Blackwell Ultra GPUs on the horizon in 2024 and 2025, respectively, the company's commitment to yearly GPU releases and bi-annual architecture updates underscores the breakneck speed of progress in this field.

NVIDIA CEO Jensen Huang asserted that "we are moving as fast as the world can absorb technology, so we have got to leapfrog ourselves," which rings true. This accelerated pace of innovation, while being a cause for concern, can be a drive for significant positive change.

Still, it raises a critical question: how can buyers keep up with the constant release of new hardware? In this article, we will explore the factors driving the rapid development of new chips, how they can benefit us, and consider how it is driving mass cloud migration.

Why chip makers are ramping up production

Several key factors propel the relentless push for faster, more powerful AI chips. The first is the rise of generative AI, large language models, and other computationally intensive applications that have created a surge in processor demand.

As discussed previously, Gen AI requires a lot of parallel processing for training and inference, which GPUs are uniquely suited for. As AI models become more complex and sophisticated, the demand for faster, more efficient chips grows exponentially.

The AI chip market is incredibly competitive, with each company striving to outdo the other in performance, efficiency, and features, resulting in a rapid cycle of innovation and product releases.

Source: NVIDIA

Intel has publicly committed to an ambitious roadmap known as "five nodes in four years" (5N4Y), which aims to accelerate the introduction of new processor technologies. The nodes are Intel 7, Intel 4, Intel 3, Intel 20A, and Intel 18A. Intel 7 and Intel 4 have already been launched, and Intel 3, 20A, and 18A are expected to follow within the stated timeframe, with 18A slated for 2025​.

These nodes have already been used in different processors. Intel 7 is used in Intel's Alder Lake processors, Intel 4 is used in Meteor Lake processors, and Intel 3 is used in the Sierra Forest processors. These releases have shortened the previous cycle of a new node every 2 years.

Amazon Web Services (AWS), Microsoft, and Google are developing their own custom chips for AI and cloud computing. AWS has developed several in-house chips, including the Graviton processors, designed by Annapurna Labs, which Amazon acquired in 2015. AWS also introduced Trainium and Inferentia chips specifically for AI workloads​.

Microsoft is developing its own AI chip to reduce dependency on NVIDIA and potentially lower costs. Additionally, Microsoft has been working on custom networking gear to optimize its Azure infrastructure.

Google is also in the custom chip game, with its Tensor Processing Units (TPUs) already well-established for AI applications. Google has been partnering with Broadcom for custom AI chip designs and has plans for more advanced server processors.

While competition, innovation, and a host of other crucial factors contribute to the shorter chip production cycles, this innovation is impacting two fundamental issues in cloud computing: environmental sustainability and the on-premise vs cloud-managed services debate.

Rapid chip advancements and AI environmental sustainability

A key dimension of the shorter chip developmental cycles is the renewed focus on energy efficiency. As I recently argued, in the race to deliver the most powerful AI processors, manufacturers are increasingly aware that environmental sustainability is a key differentiator.

Shorter development cycles mean that innovations in power-saving technologies are rapidly integrated into new chips, leading to more environmentally friendly AI solutions. NVIDIA, for instance, has consistently lowered the power consumption of its GPUs while increasing throughput.

This shift towards greener AI hardware is a significant win for the planet. The energy-intensive nature of AI processing has raised concerns about the industry’s carbon footprint. However, the accelerated pace of chip development is helping to mitigate this issue by continually improving energy saving and reducing the hazardous impact of AI.

Arguably, AI perfectly exemplifies how performance improvement can align with environmental sustainability. The performance and competitive benefits of reduced compute costs when training LLMs require manufacturers to prioritize environmental considerations during the design phase.

On-Premise or the Cloud?

While the environmental benefits of shorter chip cycles are clear, the rapid pace of innovation also presents a challenge for businesses and individuals. Keeping up with the latest hardware is increasingly difficult and expensive, making cloud computing a critical enabler.

For many buyers, the prospect of investing in expensive hardware virtually guaranteed to be surpassed by more advanced chips within months is undesirable. The constant cycle of upgrades can lead to financial strain and frustration as businesses struggle to keep pace with the latest chips.

Cloud AI offers a unique solution for deep learning projects. Cloud-based GPU as a service platforms such as CUDO Compute and Amazon Web Service provide virtually unlimited access to cutting-edge GPUs for AI and HPC workloads with package plans to transition users to newer and upgraded hardware following new hardware releases. Such solutions effectively eliminate the need to invest in expensive and rapidly depreciating hardware.

Additionally, cloud infrastructures are often designed with energy efficiency in mind, optimizing for lower electricity consumption compared to on-premise setups. Coupled with the widespread deployment of high-speed internet infrastructure, this further reduces the overall cost of Cloud AI solutions.

AWS alternatives like CUDO Compute offer flexible pricing models, including on-demand and dedicated environments. Dedicated environments provide the benefits of on-premise solutions – isolated and personalized resources – with the added advantages of cloud hosting, creating a hybrid approach that maximizes value for the user.

Cloud-based solutions guarantee scalability for AI projects, allowing them to flexibly adjust their computing resources to match evolving needs. They also eliminate the need for upfront capital expenditures on hardware, reducing financial barriers to entry. Furthermore, cloud providers often handle maintenance and updates, freeing projects to focus on their core missions.

For individuals, they open up new avenues for creativity and problem-solving. Powerful AI models, previously accessible only to those with substantial computing resources, are now available to anyone with an internet connection.

In saying these, let’s discuss some benefits, risks, and strategies for keeping up with accelerated chip development.

Effective strategies for resource optimization in an accelerated development environment

The accelerated pace of AI chip development presents a double-edged sword. On the one hand, rapid innovation fuels progress, pushing the boundaries of what AI can achieve and opening up new possibilities for numerous industries. Advancements in AI chips translate to more powerful and efficient AI models, leading to breakthroughs in areas like natural language processing and robotics.

On the other hand, these rapid innovative cycles pose challenges for AI startups and small-medium-scale AI enterprises. The constant release of new hardware can lead to a feeling of "upgrade fatigue," where consumers feel pressured to continually invest in the latest technology to remain competitive.

This can be particularly burdensome for smaller projects running on limited budgets. Additionally, the rapid depreciation of hardware can lead to a loss of competitiveness for those who invest heavily in today’s chips.

To navigate this speedy environment, AI SMEs need to adopt strategic approaches to purchasing decisions. Here are a few points to consider:

• Prioritize Needs Over Novelty: Before investing in new hardware, carefully assess your specific requirements. Consider the types of AI workloads you will run and the performance level necessary to achieve your goals. Avoid getting caught up in the hype cycle and focus on solutions that address your needs.
• Embrace Cloud Solutions: As discussed earlier, cloud computing offers a flexible and cost-effective alternative to purchasing and maintaining expensive hardware. By leveraging cloud-based AI resources, you can access cutting-edge technology without the burden of ownership, upgrade, and maintenance.
• Consider Leasing or Subscription Models: Many hardware vendors now offer leasing or subscription models, allowing users to access the latest technology for a predictable monthly fee. This can be a more affordable option than outright purchasing, especially for businesses with fluctuating workloads.
• Stay Informed: Keep abreast of the latest developments in AI hardware by following industry news and attending relevant conferences or webinars. This will help you decide when to upgrade and which technologies to invest in.

The accelerated pace of AI chip development presents both opportunities and challenges. By understanding the benefits and risks and adopting strategic approaches to purchasing decisions, AI SMEs can take advantage of a perpetually changing industry.

To get access to the latest NVIDIA GPUs at a competitive price with no upfront cost, use CUDO Compute’s GPU cloud. We offer the latest GPUs and keep you informed on the latest AI hardware developments. Sign up for free today!

About Pete Hill

Pete Hill is the Co-founder & VP of Sales at CUDO Compute. With 15+ years of experience within the cloud industry, building successful sales and channel teams, Pete is again leading strategic partnerships at CUDO, a highly experienced team of entrepreneurs and developers, driving HPC and AI computing adoption. Follow Pete on LinkedIn and Twitter.