DEFINITION of 'Graphics Processing Unit (GPU)'

A  Graphics Processing Unit (GPU) is a chip or electronic circuit capable of rendering graphics for display on an electronic device. The GPU was introduced to the wider market in 1999, and is best known for its use in providing the smooth graphics that consumers expect in modern videos and games.

BREAKING DOWN 'Graphics Processing Unit (GPU)'

The graphics in videos and games consist of polygonal coordinates that are converted into bitmaps – a process called “rendering” - and then into signals that are shown on a screen. This conversion requires the Graphics Processing Unit (GPU) to have a lot of processing power, which also makes GPUs useful in machine learning, artificial intelligence, and other tasks that require large number of complex and sophisticated computations.

Before the arrival of GPUs in the late 1990s, graphic rendering was handled by the Central Processing Unit (CPU). When used in conjunction with a CPU, a GPU can increase computer performance by taking on some computationally-intensive functions, such as rendering, from the CPU. This accelerates how quickly applications can process, since the GPU can perform many calculations simultaneously. This shift also allowed for the development of more advanced and resource-intensive software.

Processing data in a GPU or a Central Processing Unit (CPU) is handled by cores. The more cores a processing unit has, the faster (and potentially more efficiently) a computer can complete tasks. GPUs use thousands of cores to process tasks in parallel. The parallel structure of the GPU is different than that of the CPU, which uses fewer cores to process tasks sequentially. A CPU can perform calculations faster than a GPU, which makes it better at basic tasks.

The term “GPU” is often used interchangeably with “graphics card,” though the two are different. A graphics card is a piece of hardware that contains one or more GPUs, a daughterboard, and other electronic components that allow the graphics card to function.

A GPU can, however, be integrated into the motherboard or be found in the daughterboard of a graphics card. Initially, high-end computers were the only ones to feature graphics cards. Today, most desktop computers typically use a separate graphics card with a GPU for increased performance, rather than rely on a GPU built into a motherboard.

While GPUs were initially popular with video editing and computer gaming enthusiasts, the rapid growth of cryptocurrencies created a new market. This is because cryptocurrency mining requires thousands of calculations in order to add transactions to a blockchain, which is something that could be profitable with access to a GPU and an inexpensive supply of electricity.

In recent years, two prominent graphics cards manufacturers, Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD), have experienced a rapid increase in sales and revenue as a result of cryptocurrency mining.

This had the side effect of frustrating non-mining customers, who saw prices increase and supplies dry up. As a result, retailers occasionally limited the number of graphics cards that an individual could purchase. While miners of the more popular cryptocurrencies, such as bitcoin, have shifted to using specialized and more cost-effective chipsets called application-specific integrated circuits (ASICs), Graphics Processing Units are still used to mine lesser-known currencies.

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