The company has profited handsomely from an AI boom that has seen tech giants invest billions of dollars in Nvidia chips to power large language models like ChatGPT and Gemini. But doubts remain about whether these companies are actually making money from AI and whether they can maintain their breakneck spending pace.
When asked about the sustainability of customer spending on the company’s conference call on Wednesday, Huang raved about the ability of artificial intelligence to transform computing but dodged the question.
For eight minutes, Huang talked about how the world’s common CPUs are reaching their maximum capacity, extolled the wonders of accelerated computing based on GPUs, Nvidia’s flagship product, and mentioned that even sovereign countries are getting into the AI game.
“You see generative AI evolving in so many different directions, and we are currently seeing an acceleration in the momentum of generative AI,” he said.
A spokesman for Nvidia declined to comment. Assets.
The AI tools that already exist – ChatGPT, AI image generators and coding assistants – are just the tip of the iceberg. Beneath the surface lie future mainstream applications such as extremely targeted advertising, recommendation systems that predict future wants and needs, and improved search engines, he added.
But analysts were not satisfied with Huang’s answer and the issue of his customers’ spending was raised again. This time Huang didn’t mince his words.
“The people who invest in Nvidia infrastructure are getting an immediate return. It’s the best ROI infrastructure, computing infrastructure, investment you can make today,” he said.
If data center customers – which account for about $26 billion of the company’s $30 billion in revenue – have already invested $1 trillion in general computing infrastructure that Nvidia sees as a thing of the past, why would they want to build more, Huang asked.
“For every billion dollars you make on general-purpose CPU-based infrastructure, you’re probably paying less than a billion in rent because it’s a commodity,” he said.
Data centers built with Nvidia chips for accelerated computing, on the other hand, save money and see increased demand from the growing number of startups creating the “next frontier” of artificial intelligence, Huang argued.
“The world of general-purpose computing is moving to accelerated computing. The world of human-developed software is moving to generative AI software,” Huang said. “If you want to build infrastructure to modernize your cloud and your data centers, build it with accelerated computing from Nvidia. That’s the best way to do it.”
As of Wednesday, Nvidia was the second most valuable company in the world. Its market capitalization of $3.09 trillion surpassed only Apple. The company reported revenue of $30 billion, double what it posted in the same quarter last year. Its profit of $16.6 billion was also more than double what it posted a year earlier. The company expects revenue of $32.5 billion for the current quarter, above the $31.9 billion expected by analysts.
Despite Huang’s optimistic words, Nvidia shares fell nearly 6 percent in after-hours trading on Wednesday.
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