The computing industry is witnessing a future shift toward artificial intelligence-powered, Arm-based personal computers, marking a transition from traditional x86 architecture.

There are ongoing battles in the middleware layer of technology, particularly involving open-source platforms. Experts predict that new startups will emerge during this AI-driven technological cycle, driven by disruptive enablers such as open-source software.

In this week’s theCUBE Pod, analysts John Furrier (pictured, left) and Dave Vellante (right) discuss the significant impact of AI advancements, particularly generative AI, on the industry, referring to it as creating “AI shockwaves” that drive infrastructure changes and value creation.

“The theme of the podcast [will be] the shockwaves of AI hitting,” Furrier said. “What I mean by that is that you’re starting to see, as we’ve been saying on theCUBE, the lines are forming where the old way and new way are kicking, you’re starting to see the formation. Things are lining up.”

Infrastructure is starting to surge with spending, according to Furrier. Data wars also come with cloud wars.

“On the top of the stack, you’ve got copilot madness and complete developer intoxication around open-source coding and just overall AI apps,” Furrier added. “You have this perfect storm continuing to surge and the shockwaves starting to hit.”

When it comes to value creation, company valuations are up, and people are making a lot of money, according to Furrier. The value that the wealth creates is kicking in. “All of that is pumping,” Furrier said.

Nvidia signals its future strategy

There’s perhaps nothing more compelling in the market right now than Nvidia Corp. announcing a 10-for-1 stock split after delivering another crushing earnings beat. The company’s quarter was just amazing, according to Vellante.

“I said they had to beat by a billion and a half revenue in order for stock not to go down. They peaked by basically a billion and a half, which is insane,” he said. “There’s sequential revenue. They did $26 billion this quarter. And, sequentially, they grew 18%. A lot of companies would be thrilled with 18% year on year.”

There were some interesting tidbits on the earnings call, according to Vellante. At one point, Nvidia Chief Executive Jensen Huang was asked how the company can continue this innovation.

“He said, ‘Well, I can announce that there’s something coming, new chip beyond Blackwell.’ No surprise there, right? But he said, we are on a one year, he used the term rhythm,” Vellante said. “They’ve got a one-year cadence of announcements.”

Huang said the company was doubling down on ethernet and networking with NVLink. The strategy comes as people were concerned that Nvidia might hit the pause button after a Financial Times article that said Amazon Web Services Inc. was waiting for Blackwell, according to Vellante.

“[Huang said] demand is way outstripping supply. So, that says to me that Blackwell is closer than people think,” he said. “And guys like AWS are gonna get their hands on them sooner rather than later.”

But one of the most interesting things Huang said was about being first, according to Vellante. When one is first, it makes a radical improvement over everything that’s been seen before.

“He goes, ‘When you’re first, it’s like this amazing step function … when you’re second, it’s like 0.3% better. Do you want to have an amazing step function, or do you want to be 0.3% better?’ And that was really both profound and just brilliant marketing,” Vellante said.

InstructLab big announcement in open source

One of the big things that came out of this year’s IBM Think event was InstructLab, which allows open-source developers to customize Granite large language models. With InstructLab, one can do some minimal training, but then the AI takes over and generates its own training, Vellante noted.

“Then you can knuckle it down and you can bring it to market,” he said. “That was kind of interesting and a lot of optionality … in InstructLab, obviously IBM starting with, you know, it’s got Granite in there, but it’s got other models that it’s going to bring in over time.”

That was interesting when it comes to the question of how to build a moat around open source. One can’t just sit on the fence, Vellante added.

“You’ve got to be all in on open source,” he said. “If you’re going to be all in, then you’ve got to figure out, alright, well how do I build unique competitive advantage?” he said.

It’s the classic commercialization of open source, according to Furrier. One gives it out for free and then ends up becoming the steward of it. “But InstructLab … was developed by senior kernel-level developers at Red Hat in Boston,” Furrier said.

The team was so excited to make it happen, which points to why the market is exciting, Furrier added.

“There’s real technical problems to solve, and that’s going to attract real smart people to work on these killer problems,” he said. “What’s going to happen is you’re going to see some lucky strikes. You can see some lightning in a bottle.”

Watch the full podcast below to find out why these industry pros were mentioned:

Jensen Huang, founder and CEO of Nvidia
Jas Tremblay, GM for data center solutions group at Broadcom
Charlie Kawwas, president of Broadcom
Crawford Del Prete, president of International Data Corporation
David Floyer, analyst emeritus at theCUBE Research
Pat Gelsinger, CEO of Intel
Paul Ortellini, former CEO of Intel
Steve Jobs, co-founder and former CEO and chairman of Apple
Jerry Sanders, co-founder and former CEO pf AMD
Lisa Su, chair and CEO of AMD
Michael Dell, chairman and CEO of Dell Technologies
Amit Walia, CEO of Informatica
Frank Slootman, chairman of the board of directors at Snowflake
Arvind Krishna, chairman and CEO of IBM
Jeff Clarke, COO and vice chairman of Dell Technologies
Dario Gil, SVP and director of research at IBM
Matt Hicks, president and CEO of Red Hat
Rob Thomas, SVP, software and CCO of IBM
Ginni Rometty, co-chairman of OneTen, former CEO of IBM

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Photo: SiliconANGLE