Despite the AI boom, not all semiconductor firms are experiencing the same level of success as Nvidia.

• Despite the increase in demand for artificial intelligence, not all chip companies are experiencing growth, indicating the intricacies of the semiconductor industry's supply chain.
• The chip industry is benefitting from companies training AI models, with companies like Nvidia and AMD seeing growth, as well as chip manufacturers such as TSMC receiving a boost.
• Despite having minimal exposure to AI, Arm and Qualcomm have not experienced the significant revenue growth that other companies have.

Despite the growth in the artificial intelligence market, not all chip companies are experiencing profits, highlighting the intricacies of the semiconductor industry and the power dynamics among different companies in various segments.

Some semiconductor companies have exceeded expectations while others have fallen short in their financial results for the June quarter, shedding light on the impact of AI on their earnings.

The focus of current AI interest centers on two crucial concepts: large language models (LLMs) and generative AI. LLMs demand significant computing resources and data to be trained, and they serve as the foundation for generative AI applications such as chatbots from companies like Google and OpenAI.

The tech giants are not reducing their spending on training LLMs, as they expect significant growth in capital expenditure in 2025 to support their AI research and product development efforts. This week, it was announced that the company's capital expenditure rose nearly 80% year-on-year to $19 billion in the June quarter.

Nvidia has benefited greatly from the increased spending by tech giants on computing resources, as their GPUs are utilized for training large language models (LLMs).

Nvidia's competitor has introduced its own AI chip, the MI300X, for AI purposes and is now experiencing benefits. AMD predicts that data center GPU revenue will surpass $4.5 billion in 2024, an increase from the $4 billion forecast in April. The company's second-quarter earnings and revenue exceeded market expectations.

The semiconductor industry, including chip manufacturing and tool companies, is experiencing growth due to the AI boom.

The company that produces specialist tools for manufacturing advanced chips in the world reported a 24% increase in net bookings in the second quarter compared to the previous year, indicating demand from companies such as TSMC, who make semiconductors. Samsung also announced a 1,458.2% increase in second-quarter operating profit year-on-year.

Not all semiconductor companies have benefited from the growth of AI investment due to their limited exposure to the technology at this stage of development.

On Wednesday, their share price fell after issuing light guidance for the current quarter.

Despite their claims about the significance of AI in their applications, these companies' actual exposure to the technology remains minimal.

Although Arm's blueprints are widely used by companies to create chips, and its semiconductors are found in most smartphones globally, the company has not experienced significant growth due to the increasing focus on AI phones.

Despite being a British firm, it still generates a significant portion of its revenue from consumer electronics rather than data centers, where AMD and Nvidia have excelled. Previously, analysts have advised CNBC that Arm could benefit from AI as more devices incorporate the technology.

Qualcomm's chips are used in Samsung smartphones and the company still generates a significant portion of its revenue from handsets. Unlike Arm, Qualcomm's silicon is not utilized in data centers for training LLMs.

Microsoft's upcoming AI PCs will feature Qualcomm's chips, but this is a long-term strategy for the company.