Nvidia proves that corporate appetites for AI aren’t letting up

With almost every tech giant relying on its chips to power their AI offerings, Nvidia’s earnings have come to be seen as a bellwether for the health of the generative revolution.

By that measure, AI hype is still very much alive and well: The chipmaker delivered another earnings report that rocketed past expectations this week, with quarterly revenue of $22.1 billion, up 265% from the previous year and 22% from the previous quarter.

Last week, Nvidia grabbed the title of third-most-valuable public company in the US, and it solidified that lead this week with a stock rally that boosted its market cap to $1.9 trillion as of Thursday morning.

Nvidia CEO Jensen Huang has framed his company’s meteoric rise in lofty talk of a new computing era and even the next “industrial revolution.” He once again signaled big ambitions on this week’s call, predicting a “doubling of the world’s data center infrastructure installed base in the next five years.”

“Like AC power generation plants of the last industrial revolution, Nvidia AI supercomputers are essentially AI generation factories of this industrial revolution,” Huang said in the call. “Every company in every industry is fundamentally built on their proprietary business intelligence. And in the future, their proprietary generative AI. Generative AI has kicked off a whole new investment cycle to build the next trillion dollars of infrastructure of AI generation factories.”

So what could stand in the way of those big plans? Sales in China have “declined significantly” due to the US government’s export restrictions, according to CFO Colette Kress, who noted in a Q3 earnings call that sales in countries affected by those regulations have made up 20%–25% of Nvidia’s total revenues.

Perhaps more existentially, several tech companies are investing in making their own AI chips, including Microsoft, Amazon, and Google. Most recently, the Wall Street Journal reported that OpenAI chief Sam Altman is trying to raise trillions of dollars to challenge Nvidia.

For now, though, Nvidia’s success serves as a sign of just how strong the appetite remains for generative AI in the business world.

“AI generation factories are going to be in every industry, every company, every region,” Huang said. “This last year, we’ve seen generative AI really becoming a whole new application space, a whole new way of doing computing, a whole new industry is being formed, and that’s driving our growth.”