Watch out for NASDAQ stock NVIDIA: This is how the South Korean rival SAPEON wants to dethrone the market leader

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• NVIDIA is the market-leading chip manufacturer in the field of AI
• Competition also comes from South Korea
• Start-up SAPEON wants to break NVIDIA’s dominance with a financing round

Despite a decline in profits and sales in the fourth quarter, NVIDIA investors and observers were positively surprised by the chip giant’s latest balance sheet presentation: after all, the Americans performed better than the market expected. NVIDIA benefited in particular from the boom in applications with artificial intelligence – a business segment in which the company intends to continue investing numerous resources. NVIDIA technologies are already specialized in AI applications, and large partnerships with cloud providers are intended to reinforce this trend, announced NVIDIA boss Jensen Huang as part of the balance sheet presentation.

But NVIDIA isn’t the only player in the AI ​​space — and it may not be the best-positioned at all levels, either. This was recently recognized by former NVIDIA bull Cathie Wood, who has been selling NVIDIA shares on a large scale for months and instead is increasingly targeting other industry representatives: In addition to Wood’s all-time favorite Tesla, this is EXACT Sciences in particular, a company with a Leading position in molecular diagnostic tests in oncology and a broad database suitable for training with AI.

NVIDIA competition comes from South Korea

New competition for NVIDIA – from its own industry at that – is now also coming from South Korea, where the start-up SAPEON has started to take market share from the market leader.

SAPEON manufactures chips for AI applications and designs semiconductors for artificial intelligence for use in data centers – the South Koreans are explicitly poaching in the territory of NVIDIA, AMD & Co. “Thanks to the development of AI services such as ChatGPT, AI solutions will grow strongly” , said Soojung Ryu, CEO of SAPEON, recently in an interview with CNBC on the occasion of the Mobile World Congress. “We would like to build this kind of system (AI chips) to have a chance in the business,” Ryu continued. The head of the company is aware that SAPEON, with its declared focus on the US market, is in direct competition with NVIDIA, and this decision was obviously made on purpose. When asked if SAPEON can challenge NVIDIA, Ryu replied “Yes”.

With the X220, SAPEON currently has a 28-nanometer AI chip on the market, which, according to its own statements, is said to have outperformed NVIDIA’s A2 chip “by a factor of 2.3”, according to a SAPEON press release . “SAPEON is one of the world’s leading AI semiconductor companies and we are pleased that the X220 – whose competitiveness has already been verified through internal commercialization – has been independently recognized for its excellent performance in the MLPerf benchmark and has received significant attention in the market through testing .”

Start-up looking for investors

SAPEON was founded in 2016 by SK Telecom, one of South Korea’s largest telecommunications companies. The founding company spun off the start-up last year and went in search of external investments.

Soojung Ryu recently announced a fundraising round that would secure SAPEON a valuation of over 400 million US dollars. The California-based start-up will continue to receive support from SK Telecom, SK Hynix and SK Square.

The money should also flow into the development of a new AI chip. Ryu told CNBC his company will release a 7-nanometer AI chip made by Taiwan Semiconductor (TSMC), the world’s largest contract chip maker, later this year. That would bring SAPEON closer to the current technology on the market.

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