Nvidia's results show AI spending boom continues
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Nvidia CEO Jensen Huang delivers a keynote address. Photo: Justin Sullivan/Getty Images
Nvidia's strong earnings report on Wednesday highlights that spending on artificial intelligence infrastructure continues to grow even amid an undercurrent of concern that generative AI may not be able to live up to all of the hype.
Why it matters: Nvidia chips have become the processors of choice for AI systems, and also made Nvidia one of the world's most valuable companies.
Driving the news: Nvidia posted better-than-expected quarterly earnings and revenue along with a forecast for the current quarter that also exceeded analyst expectations.
- Nvidia said its next-generation Blackwell processor will begin shipping for production in the fourth quarter, generating billions of dollars in revenue.
- Even still, Nvidia said it expects the business for its current Hopper chips will grow in the second half of the year.
- "Hopper demand remains strong, and the anticipation for Blackwell is incredible," Nvidia CEO Jensen Huang said in a statement.
Yes, but: Investors appear to have already priced in some of the future growth, sending shares lower after the report.
The big picture: Nvidia's strong results come even amid growing competition from rival semiconductor firms as well as efforts by internet giants to design their own AI chips.
- AMD has made it clear it wants to take a bite out of Nvidia's AI business. The Nvidia competitor recently purchased ZT Systems. That company's expertise in building servers could help AMD with large customers who want to buy entire custom systems rather than just chips.
- A host of upstarts have been raising hundreds of millions of VC dollars for their own AI chip designs; the list includes Cerebras, d-Matrix and Groq.
- Microsoft, Meta, Amazon, Alphabet and OpenAI — all key customers for Nvidia and buyers of Blackwell — are also working on their own homegrown chip designs.
What's next: Huang predicted Nvidia will benefit next year and beyond from a continued shift away from traditional data center processors to the types of GPUs made by Nvidia.
- "The next trillion dollars of the world's infrastructure will clearly be different from the last trillion," Huang said on a conference call with analysts. "Next year is going to be a great year."
