How Nvidia Plans to Earn Money from Rival Chips

FomoAnxiety · 2026-03-24T00:46:26+00:00

Nvidia is adapting to increased competition in AI chips by introducing the MGX ETL rack, which supports both its chips and rivals. This allows Nvidia to earn revenue from software and networking, maintaining its central role in AI despite market changes.

FomoAnxiety

2026-03-24 00:46:26

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Chipmaker Nvidia (NVDA) is facing more competition in AI chips, but it is finding a way to still make money even when customers use rival chips. At its recent GTC conference, the company introduced a new server rack that can run both Nvidia chips and competitors’ chips. These racks use Nvidia’s networking technology to help all the chips communicate quickly and efficiently. Because of this, Nvidia can still earn revenue from its software and networking, even if its own chips are not being used. In addition, this new system, called the MGX ETL rack, is designed to be easier for customers to use.

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Unlike Nvidia’s older NVLink system, which requires a special setup, the ETL rack runs on Spectrum-X Ethernet-based networking, which most chips already support. As a result, companies can more easily integrate different types of chips into a single system. This is especially useful in places like China, where companies can use locally made chips while still relying on Nvidia’s technology. Moreover, the rack can hold up to 256 chips and is based on Nvidia’s MGX design, which has become a standard for its data centers.

Looking ahead, this approach helps Nvidia stay at the center of the AI industry, even as more competitors enter the market. In fact, networking already made up more than $11 billion in revenue last quarter after growing by 268% year-over-year. It is also worth noting that the AI industry is moving from training models to running them at scale, which requires faster and more efficient systems. In fact, CEO Jensen Huang said that demand for AI computing has surged massively, with reasoning workloads rising by about 10,000 times in just two years.

What Is a Good Price for NVDA?

Turning to Wall Street, analysts have a Strong Buy consensus rating on Nvidia stock based on 41 Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average Nvidia price target of $274.03 per share implies 55.1% upside potential.

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