Without Nvidia’s high-powered chips, there would be no generative artificial intelligence boom. Demand already outstrips supply. The company’s lead over rivals is about to be extended with the release of a new specialist AI chip. If analyst forecasts are correct, annual revenues will more than triple over the next three years to top $98bn.
Chief executive Jensen Huang’s bet on AI grows more bombastic by the day. It will, he says, be “bigger than the internet”. On Tuesday he declared that it represented the biggest expansion of total addressable market for software and hardware. However big the projections are, Huang wants them to be bigger.
If he is right then Nvidia’s lack of competition and wealthy enterprise customers put it in clover. Tech companies with fat cash piles are investing in AI in a bid to improve services and raise productivity. With gross margins at 74 per cent, Nvidia’s own cash pile has grown by $5bn in the fiscal year to date to $18bn. Along with chips, it is selling more products and services devoted to expanding use, including a new kind of Ethernet switch. Its market cap hit a record $1.25tn this week. It has come to represent the market’s collective hopes and dreams for AI.