Nvidia CEO Jensen On Wednesday, Huang needed no encouragement to address the elephant in the room. “There’s been a lot of talk about the AI bubble,” he said on the earnings call, before quickly getting to his main point: “From our perspective, we see something completely different.”
Huang then spent about five minutes explaining how the chipmaker, which has become the most valuable publicly traded company in the past three years, will be able to meet unprecedented customer demand. His thesis is that artificial intelligence is taking over the world, and Nvidia chips will be badly needed to power the ongoing technological revolution. “All industries, at every stage of artificial intelligence, with all the diverse cloud computing needs, and from cloud to enterprise to robots” will need Nvidia products, Huang said.
The CEO’s pep talk ultimately sparked mixed reactions on Wall Street. Nvidia shares have fallen about 10 percent in recent weeks after hitting an all-time high in behind schedule October. The company’s shares rose in after-hours trading Wednesday after Nvidia announced record quarterly sales and Huang spoke out against the bubble. However, this escalate was not enough to fully offset the recent sell-off.
Nvidia has enjoyed tremendous success over the past three years since OpenAI debuted on ChatGPT and drove a huge surge in demand for the company’s GPUs, which are used to train and run generative AI systems. Nvidia dominates the global GPU market, and its latest products are in high demand, with demand far outpacing supply. On Wednesday, Nvidia executives reiterated that it had about $500 billion in unfulfilled orders.
The company used its newfound wealth to buy back its own stock and invest billions of dollars in artificial intelligence companies, including leading users and customers of its chips such as ChatGPT developer OpenAI, data center operator CoreWeave and Elon Musk’s xAI, which is developing the Grok chatbot.
Nvidia’s deals have raised concerns among some investors that the company is unsustainably supporting sales. AI industry executives say working closely with Nvidia is crucial to gaining access to chips and technical support, and that their revenue will eventually grow enough to fund GPU purchases.
During Wednesday’s call, Huang addressed a financial analyst’s question about the wisdom of investing in companies like OpenAI. “The partnership we have with them allows us to work even deeper from a technical perspective so that we can support their accelerated development,” Huang said. “I fully expect this investment to translate into extraordinary returns.”