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NVIDIA Joins VMware to Drive AI Acceptance Amid Enterprises

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NVIDIA NVDA recently partnered with VMware VMW to deliver accelerated GPU services by bringing its virtual GPUs to VMware Cloud on AWS, Amazon’s AMZN cloud platform.

Reportedly, the new services leverage Amazon’s EC2 bare-metal instances, expedited by NVIDIA T4 GPUs and NVIDIA’s new Virtual Compute Server (vComputeServer) software.

With this partnership, VMware will now be able to provide its customers with a high-performance AI compute infrastructure.

The launch of NVIDIA’s vComputeServer software will enable customers to easily shift the existing VMware vSphere-based applications and software containers to VMware Cloud on AWS. This hybrid cloud offering will let enterprises use GPUs to speed up AI, machine-learning or deep-learning workloads.

NVIDIA’s virtual GPU technology, which now supports vSphere, so far supported KVM-based hypervisors from Nutanix and Red Hat. The vComputeServer will be available from major OEMs like Cisco, Dell, Hewlett Packard Enterprise, Lenovo and Super Micro.

Amping Up AI Adoption to Aid Growth

NVIDIA’s GPUs are rapidly benefiting from the proliferation of AI. By applying its GPUs in AI models, the company is expanding its customer base across multiple industries.

The implementation of machine-learning applications, such as image and voice recognition, financial modeling and natural language processing among enterprises are finely performed on its GPUs as it speeds up training and real-time inferences. As a result, growing demand for its GPUs is likely to remain a key driver.

The company is engaged with a number of organizations including the top cloud server companies like Amazon, Baidu and Facebook, which are infusing AI in various applications.

Solid sales of the company’s GPUs for use in the cloud are a positive. The way the AI startups use its platform to develop AI in the cloud is helping drive cloud computing growth.

On the last earnings call, management mentioned that “the wave of AI is going from the cloud to the enterprise to the edge and all the way out to the autonomous systems.”

The company is most optimistic about expanding growth opportunities from the vertical industry enterprises that are starting to adopt AI to create new products and services.

Notably, in the vertical industries’ portion of the datacenter business, extending AI workloads drove sequential and year-over-year growth in the last reported quarter. Public sectors, higher education and financial services were among the key verticals, which remained major drivers.

Although the temporary pause on hyperscalars spending is a challenge to the datacenter business at present, positive trends in both high-performance computing and the enterprise side of it are tailwinds.

Moreover, a steady ramp-up of the new products is enabling the company to gain a competitive edge over the likes of AMD and Intel INTC, and also widen its market share.

NVIDIA Corporation Revenue (TTM)

NVIDIA Corporation Revenue (TTM)

NVIDIA Corporation revenue-ttm | NVIDIA Corporation Quote

NVIDIA carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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