Artificial intelligence (AI) chip startup FuriosaAI wants to challenge Nvidia’s (NVDA) domination of the market, and it just signed its first major deal. The company reached an agreement with LG AI Research for its AI chip, RNGD. This came after seven months of testing to determine the performance and efficiency of the chips.
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FuriosaAI may be new to the AI chip sector, but it has leadership with deep experience in the field. Founder and CEO June Paik previously worked at Samsung (SSNLF) and Advanced Micro Devices (AMD) before leaving to establish FuriosaAI in 2017. He believes the latest deal with LG AI Research “signals that our product is ready for enterprise adoption.”
Can FuriosaAI Compete in the AI Chip Sector?
FuriosaAI is entering an already saturated market, meaning it has an uphill battle ahead of it. The company has to compete with Nvidia, which dominates the field of AI chips and servers with its graphics processing units (GPUs).
Other strong competitors in the field include AMD, Broadcom (AVGO), Arm (ARM), Marvell Technology (MRVL), and Super Micro Computer (SMCI). There are also rival startups trying to enter the space, such as Rebellions and Semifive, adding even more competition to the market.
What Is the Best AI Stock to Invest In?
The easy answer to this question is Nvidia, largely thanks to its strong grip on the AI chips sector. NVDA stock sports a consensus Strong Buy rating and a possible 8.76% upside. However, Broadcom and Marvell Technology also have Strong Buy ratings and significant upside potential.
Getting to AMD, ARM, and SMCI, each of these AI stocks have consensus Moderate Buy ratings. AMD and Super Micro Computer have price targets that suggest downsides, while Arm has a potential 3.5% upside.
