Spiking demand for AI infrastructure is powering SGH: CEO

SMART Global Holdings (SGH), known for designing, building, and managing AI infrastructure systems, announced it secured a $200 million investment from SK Telecom (SKM) and that it will be changing its name to Penguin Solutions, its biggest brand.

SMART Global Holdings CEO Mark Adams joins Market Domination Overtime to discuss the new $200 million investment in the company, its involvement in the AI sector, and more.
Adams explains the company's competitive edge against bigger names in the space like Hewlett Packard Enterprise (HPE): "The competitive advantage is what I'm referring to is that that kind of software service layer, when the company's names, you just mentioned are traditionally more hardware focused. And if you look at the margin profile of their business and our business, it's just different. By the way, and they're partners of ours. So it's not bad or good. It's just our gross margin is substantially higher because we play in more of a service and software part of the solution."
Adams elaborates on current motivations to invest in AI and an AI infrastructure as companies are still solidifying their proof of concepts:
"I think what's really encouraging for all the ecosystem players is that in these large language models, the number of parameters that run these models are going like triple, quadruple. And so from that perspective, the amount of compute resources and data center resources are going to be substantial. What's interesting right now in the data center space is there's not enough of them with AI power, there's not enough megawatts. So there's a constraint right now on data centers that are enabled to drive AI. And so that's providing a lot of motivation for people to make that investment."
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