SANTA CLARA, California: Nvidia Corp, the world's most valuable listed chip company, said that to meet soaring customer demand for AI applications, it was building Israel's most powerful artificial intelligence (AI) supercomputer.

The cloud-based system, known as Israel-1, will cost hundreds of millions of dollars and be partly operational by the end of 2023, Nvidia added.

Gilad Shainer, senior vice president at Nvidia, said Nvidia worked with 800 Israeli startups and tens of thousands of software engineers.

Israel-1 is predicted to be one of the world's fastest AI supercomputers, performing at speeds of up to eight exaflops of AI computing, equivalent to the ability to perform 1 quintillion, or 1,000,000,000,000,000,000, calculations per second.

AI is the "most important technology in our lifetime," Shainer said, stressing that AI and generative AI applications with large graphics processing units (GPUs) must be developed.

"Generative AI is going everywhere nowadays. You need to be able to run training on large datasets. This system is a large scale system that actually will enable them to do training much quicker, to build frameworks and build solutions that can tackle more complex problems," Shainer told Reuters.

Nvidia's first priority for the supercomputer was its Israeli partners, Shainer added, stating, "We may use this system to work with partners outside of Israel down the road."

Last week, Nvidia said it had worked with the University of Bristol in the UK to build a new supercomputer using a new Nvidia chip, which was designed to compete with Intel and Advanced Micro Devices chips.