Three technology fears today are spilling out into the markets and politics, making them more than tech stories: AI, data center proliferation and circular financing. Nvidia sits at the center of all three.
So Nvidia’s earnings report Wednesday was about more than the numbers. It was a chance for Nvidia CEO Jensen Huang to alleviate those fears. Or at least justify Nvidia’s AI strategy.
The numbers were strong as always for the GPU giant. Nvidia’s revenue of $96.2 billion beat analysts’ expectations by more than $4 billion and more than doubled (up 106%) year-over-year. Its $89 billion in data center revenue increased 117% year-over-year. Nvidia also more than doubled its year-over-year profit, to $60 billion.
“As you’re probably aware, AI has become useful,” were the first words Huang spoke during the earnings call.
Nvidia forecasts 70% revenue growth over the next year, despite industry-wide supply issues and price increases. It marked the first time Nvidia gave guidance a full year out.
“We want to make sure everyone has the same information,” Huang said.
That information is unlikely to sway the AI and data center skeptics but neither AI nor data centers are going anywhere. Huang pointed to Nvidia’s results and the tech world’s investment in AI as evidence that AI and the infrastructure required to run it have become necessities.
"AI infrastructure is creating jobs all over the United States and around the world," he said. "It just takes a lot more planning, so we're involved in securing infrastructure further down the pipeline. “The big picture is, we're going through a platform shift that affects every computer company and every industry. Because this new way of computing generates intelligence rather than just retrieving files — and that requires compute. But the results are phenomenally better. Everybody wants to be part of the AI revolution and has to build infrastructure."
During the earnings call, Nvidia discussed an expanded partnership with AWS. The hyperscaler is expected to deploy two million additional Nvidia GPUs through the next year. Nvidia has invested close to $100 billion in hyperscalers and AI pioneers such as Anthropic and OpenAI, who in turn pledge to spend money on Nvidia infrastructure.
“Some call this circular financing — we see it differently,” Nvidia CFO Colette Kress said. “We're going through a major computing platform shift, the creation of some of the most important technologies in human history, and these are once-in-a-generation companies. We expect them to become the largest technology companies in history. We believe these investments will be excellent, and our risk is limited.”
Huang added: “Investing in these companies — OpenAI, Anthropic, and several other AI labs — is a once-in-a-generation opportunity. My only regret is not investing more sooner. Several of these companies will likely go public soon, and they'll be among the most consequential technology companies in history. I'm delighted to be their partner, delighted to be their friend.”
Huang summed up by calling for more compute to generate more AI – and more revenue for Nvidia, partners and customers.
“I think the most important thing that matters for the industry is that, one, AI is now doing useful work,” Huang said. “Two, AI is generating profitable tokens, and three, if we had more compute, we could generate more profitable tokens, which results in more profit for all of the services. This is the exact phase where we're at, which is the reason why everybody's leaning in.”