8 minute read

How AI is Contributing to the GPU Shortage

Emmanuel Ohiri

Emmanuel Ohiri

Graphics Processing Units (GPUs) have become an integral component of modern technology. Initially designed to handle the rendering of images and videos in gaming consoles and computers, GPUs have found themselves at the forefront of the Artificial Intelligence (AI) revolution. Their ability to perform thousands of calculations simultaneously makes them ideal for the parallel processing requirements of machine learning and deep learning applications.

As technology advances at breakneck speed, an unexpected issue has surfaced: a global shortage of GPUs. This problem is not merely a minor hiccup in the tech industry; it's a significant roadblock affecting various sectors, from gaming to scientific research. While there has always been a shortage of GPUs, the need for AI, which heavily relies on GPUs to power its algorithms, has exacerbated the shortage.

This article explores how the escalating demands of AI technologies have contributed to this GPU supply shortage, breaking down the impact and its potential implications for our tech-driven world.

What is the role of GPUs in AI modelling?

GPUs are specialised electronic circuits designed to rapidly manipulate and alter memory to accelerate the creation of images in a frame buffer intended for output to a display device. Initially, they were developed to handle the computational demands of 3D computer graphics. However, they have since found a significant role in other system areas, most notably in Artificial Intelligence (AI) and machine learning.

GPUs are particularly suited for AI and machine learning tasks because they can process multiple computations simultaneously. This contrasts with Central Processing Units (CPUs), designed to handle one task simultaneously but at a higher speed. A single GPU can have thousands of cores working together, enabling it to handle multiple tasks concurrently. This parallel processing capability makes GPUs ideal for the heavy computational requirements of AI and machine learning algorithms, which often involve large datasets and complex mathematical operations.

While CPUs are still used for certain tasks in AI applications, GPUs have emerged as the more efficient option for other tasks. The primary reason for this is that AI and machine learning algorithms involve a lot of matrix and vector operations - tasks that GPUs excel at due to their parallel processing capabilities. On the other hand, with their sequential processing approach, CPUs are not as efficient at handling these types of tasks.

Moreover, training AI models involves processing large data volumes, which requires substantial computational power. With their numerous cores, GPUs can handle this data much more efficiently than CPUs.

Does AI run on GPU?


AI applications often rely on GPUs (Graphics Processing Units) to accelerate their computations. GPUs are well-suited for parallel processing tasks required by AI algorithms, making them an integral part of AI infrastructure.


The surge in AI demand

Artificial Intelligence (AI) and machine learning are no longer the stuff of science fiction; they've become an integral part of our everyday lives, influencing everything from how we shop to how we work. The demand for these technologies is surging across various industries, and this surge is driving the demand for Graphics Processing Units (GPUs), which power AI algorithms.

Several trends are contributing to the growing demand for AI and machine learning. For instance, there's been a significant increase in the use of AI for data analysis. Companies are leveraging AI to analyse large datasets and extract valuable insights that can inform business decisions.

Another trend is the rise of autonomous vehicles. These vehicles rely heavily on AI for navigation, object detection, and decision-making. Each autonomous vehicle generates terabytes of data daily, requiring powerful GPUs for processing.

AI is also playing an increasingly critical role in healthcare. Machine learning algorithms are used for everything from diagnosing diseases to developing new drugs. These applications require substantial computational power, further driving the demand for GPUs.

According to Grand View Research, the global AI market is projected to reach approximately $1.8 trillion by 2030, growing at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030. This significant growth is expected to be driven by the increasing adoption of AI technologies across various industries. This will likely boost the demand for GPUs and other AI hardware due to the high computing capabilities required for AI applications.

The surge in demand for AI and machine learning across various industries drives the demand for GPUs.

Impact of AI on GPU supply

The rising demand for powerful processors due to the widespread adoption of AI technologies in sectors like healthcare has caused significant supply chain challenges.

Specific cases highlighting the GPU shortages linked to AI developments have been reported recently. One such report by CNN highlighted the bottleneck created by the shortage of powerful chips, affecting the growth and innovation in the AI field. Similarly, Techspot reported that the AI boom could lead to a new wave of GPU shortages.

NVIDIA, a leading manufacturer of GPUs, acknowledged the current problem but remained optimistic about the situation's resolution. However, whether manufacturers can keep up with the growing demand without compromising performance and cost remains to be determined.

Implications of GPU shortage in the tech industry

The ongoing GPU shortage has wide-reaching implications, impacting the tech sector, other industries, and consumers. The shortage, driven mainly by skyrocketing demand for AI applications, is creating a ripple effect that's being felt throughout the global economy.

One of the hardest-hit sectors is the gaming industry. GPUs are essential for rendering high-quality graphics in video games, and the shortage has made it increasingly more work for gamers to upgrade their systems. This has led to consumer frustration and potential revenue losses for gaming companies.

The GPU shortage also affects small businesses and startups in the tech sector. Many AI startups rely on GPUs to power their algorithms and applications. According to a report by Wired, the NVIDIA chip shortages have left many AI startups scrambling for computing power.

Moreover, the shortage is having broader implications for innovation and technological progress. As TechUK points out, the GPU shortages could impact the AI revolution. Without adequate access to GPUs, companies may struggle to develop new AI applications or improve existing ones.

The supply chain disruptions are also expected to continue into the foreseeable future. NVIDIA's CEO anticipates that the shortages will affect the company's supply chains for years. This suggests that the effects of the GPU shortage could be long-lasting.

The GPU shortage is a complex issue with wide-ranging implications. It's affecting multiple sectors, from gaming to AI startups, and could slow down technological progress. However, it also presents an opportunity for innovation, as companies are forced to find alternative solutions and explore new technologies.

Will AI cause a GPU shortage?


The rapid boom in AI technology has raised concerns about a potential GPU shortage. Reports indicate that the demand for GPUs from AI companies, big and small, could lead to a repeat of the price surge experienced during the pandemic.


Responses and solutions to GPU shortage

One trend that is emerging as a result of the shortage is a shift towards alternative processors. For example, some users have switched from GPUs to CPUs due to the chip shortage.

Policy and regulation also play a crucial role in managing such shortages. Governments worldwide are boosting local semiconductor production and reducing dependency on foreign suppliers. The U.S. government, for instance, has proposed significant investments in the semiconductor industry as part of its infrastructure plan.

While the GPU shortage presents significant challenges, it is driving innovation and strategic thinking. Manufacturers and businesses are responding with creativity and policy tweaks. The situation underscores the importance of diversifying supply chains and investing in alternative technologies to ensure resilience and sustainability.

These solutions have their challenges. Switching to alternative processing technologies requires significant investments and may not be feasible for all companies, especially small startups.

In the meantime, one practical solution for businesses and individuals is to utilise platforms like CUDO Compute, which offers a cloud-based solution that can be an alternative to owning physical GPUs.

CUDO Compute provides users access to high-performance computing power without upfront investment in hardware. It's a flexible, cost-effective solution that can help you navigate the current GPU shortage while positioning yourself for future success as the tech landscape evolves. Get in touch to learn how our collection of HPC GPUs can support your AI and ML workloads.

About CUDO Compute

CUDO Compute is a fairer cloud computing platform for everyone. It provides access to distributed resources by leveraging underutilised computing globally on idle data centre hardware. It allows users to deploy virtual machines on the world’s first democratised cloud platform, finding the optimal resources in the ideal location at the best price.

CUDO Compute aims to democratise the public cloud by delivering a more sustainable economic, environmental, and societal model for computing by empowering businesses and individuals to monetise unused resources.

Our platform allows organisations and developers to deploy, run and scale based on demands without the constraints of centralised cloud environments. As a result, we realise significant availability, proximity and cost benefits for customers by simplifying their access to a broader pool of high-powered computing and distributed resources at the edge.

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