Nvidia's Huang says no chip bust "for a while"
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Nvidia CEO Jensen Huang says that despite the chip industry's long history of boom-and-bust behavior, "this time is different."
Why it matters: As the leader of the world's most valuable public company and the most important maker of AI semiconductors, Huang's words carry weight when it comes to an industry that is increasingly driving the markets and the economy.
The latest: Huang just sat down with Axios co-founder Mike Allen for a wide-ranging discussion on the state of play in AI.
- The Nvidia CEO argued that even accounting for the intensely cyclical history of the chip industry — outlined by the ups and downs shown in the chart above — the current boom has room to run.
What they're saying: When asked if the industry was due for a bust, Huang countered: "No, not for a while."
- "This time is different because this is not demand-driven," Huang said, later clarifying that the current boom is not led by consumer demand, which long called the tune for the industry.
- "This is industrially driven, meaning the fundamental technology of computers is changing."
- "We need a whole new layer of infrastructure in the world. We have energy. We have the internet. We have roads. We have railroads. We now need AI, the intelligence layer, built, this infrastructure layer built on top of all of that. And this layer needs chips."
- "I believe we probably need our semiconductor industry to be somewhere between, you know, five to 10 times larger than it is. ... It is way too small today."
- "Everything is in such short supply because it's not a cyclical nature. It's not demand from consumers. It's not because of anything like that. It's fundamental, infrastructure-related. And so the whole industry is short. I think we have to build up the industry several more times."
What we're watching: How surging chip demand is transforming the fortunes of long-troubled U.S. semiconductor giant Intel.
- Intel surged in the after-hours session Thursday, after reporting gangbusters Q2 results and revenue growth of 25%, which CEO Lip-Bu Tan described as "the strongest revenue growth in more than fifteen years."
- "AI is driving unprecedented demand for compute," Tan said.
