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

Nvidia ceo volta tesla v100

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

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.

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.

nvidia volta tensor core illustration

“It’s exciting, especially to get Jensen’s signature,” Silvio Savarese, an associate producer of computer science at Stanford, said in a Nvidia press release. “My students will be even more excited.”

Courting the favor of researchers is not a new tactic for Nvidia. The company is known for sponsoring research in artificial intelligence and making sure its hardware is being used at top universities around the world.

Giving its chip to researchers who get excited about the technology and begin using it in their research is only the latest move in Nvidia's strategy of courting strong relationships with researchers.

The move also demonstrates the company's strong culture of innovation. MIT named Nvidia the smartest company in the world, in part, because the company's culture is geared toward increasing adoption of its GPUs in every aspect of applicable computing.

AMD, Nvidia's biggest rival in GPU manufacturing, is geared toward addressing the low-end market, while it seems like Nvidia's ambitions are much larger. In addition to AI research, the company has addressed the self-driving car and cryptocurrency mining markets with specialized chips.

Its autonomous driving technology is currently being used by Toyota, Tesla, Audi, Mercedes-Benz, BMW and more.

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