Image: iStockphoto/traviswolfeThanks to cryptomining GPU prices are skyrocketing Watch Now In after-hours trading on Thursday, NVIDIA's shares dropped up to 5%, according to aReuters report. And while that's bad news for the chipmaker, it could
Thanks to cryptomining GPU prices are skyrocketing Watch Now
In after-hours trading on Thursday, NVIDIA's shares dropped up to 5%, according to a Reuters report. And while that's bad news for the chipmaker, it could be good news for data scientists and engineers working on artificial intelligence (AI) programs.
The market demand for GPUs is still high but it recently started dropping off with a very particular audience: Cryptominers. According to the report, that's the reason for the falling share prices.
"Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million," NVIDIA CFO Colette Kress said in a statement. "Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward."
SEE: IT leader's guide to the blockchain (Tech Pro Research)
In 2017, cryptocurrency miners bought some 3 million GPUs, with NVIDIA, AMD, and Intel leading the market. Late last year NVIDIA CEO Jen-Hsun Huang said that "Cryptocurrency and blockchain are here to stay," noting in an earnings call at the time that he believed "The market need for it is going to grow, and over time it'll grow quite large."
The popular cryptocurrency Bitcoin also hit its record $19,000 price in late 2017 (followed by a dip), while malicious cryptomining also grew. However, the market in 2018 has changed dramatically.
In a recent earnings call, Huang went as far as to say that, despite earlier projections, NVIDIA considered sales related to crypto "immaterial for the second half" of the year, as noted in Reuters report.
However, the drop in interest from the crypto world could actually be good news for other types of NVIDIA customers--namely gamers, AI engineers, and data scientists. The explosive growth of cryptomining led to a shortage of CPUs in 2017, that continued into 2018. This made it harder for gamers, professionals, and even astronomical researchers to find the GPUs they needed. At one point, Huang himself even had to address the scarcity, noting his preference that GPUs be reserved for gamers and those running high-performance computing workloads.
For now, at least, it seems that the market is slowing down and these customers may be able to much more easily find the GPUs they need.
Despite the crypto downturn NVIDIA is doing alright with recent revenue growth from its gaming business and the launch of its new Turing architecture to attract video producers.The big takeaways for tech leaders: NVIDIA's shares took up to a 5% hit following a drop in GPU interested from the cryptocurrency mining market. With less interest from cryptominers, gamers and data scientists may have an easier time finding the GPUs they need at fair prices.
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