A significant shift in artificial intelligence (AI) is underway, focusing on Small Language Models (SLMs) rather than the currently popular Large Language Models (LLMs). This transition is set to disrupt the entire semiconductor supply chain as AI moves from cloud-based systems to embedded, real-world applications.
Companies such as Apple and Meta are already leveraging SLMs for products like upgraded Siri and smart glasses, respectively. Amid this shift, market analysts indicate a potential change in AI investment strategies, emphasizing edge computing and smaller-scale models that can operate at low costs and power consumption.
The reorientation toward SLMs means manufacturers of edge technologies, including Qualcomm and Ambarella, may see increased demand, while companies reliant on cloud-based infrastructure, like Nvidia, could face challenges as the focus shifts to decentralized AI solutions.
