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Nvidia gave away its newest AI chips for free — and that's part of the reason why it's dominating the competition (NVDA)

One wouldn't think that giving away your best product is a winning business strategy, but for Nvidia, it's one that's working.

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One wouldn't think that giving away your best product is a winning business strategy, but for Nvidia, it's one that's working.

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The graphics processing unit (GPU) maker arrived at a gathering of the top researchers with gifts. Nvidia gave 100 of its first "Volta" based GPUs to artificial intelligence researchers at the CVPR conference in Hawaii this week, according to a company press release.

Volta is the new GPU architecture Nvidia revealed earlier this year. The new chips were promised to be such an improvement over current models that shares of the company jumped 17.8% in a single day after their announcement.

AI research requires training a computer program to be as efficient as possible before it works well. This training requires multiplying matrices of data, which normally would have to be done single numbers at a time. The new Volta GPU architecture is able to multiply entire rows and columns of matrices data at once, rapidly speeding up the AI training process. Nvidia claims the new Volta architecture is 12 times faster at processing matrix multiplication than its previous "Pascal" architecture. It reduces the duration of an AI training task that used to take 18 hours to 7.4 hours, according to company data.

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Nvidia gave away 15 of its Volta-based Tesla V100 chips to top researchers attending the conference. The chips were some of the first ones available outside of the company, and were signed by CEO Jensen Huang.

Shares of Nvidia are up 62.85% this year, compared to the 9.46% advance by the S&P 500.

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