Nvidia's high-end GPUs remain in hot demand from high-tech Giants Building data centers for artificial intelligence applications. However, investors are questioning whether large-scale AI investments are sustainable.
“The data center results are large, but we gave hints that hyperscalar spending could be tighter at margins when short-term returns from AI applications are difficult to quantify.”
“At the same time, US export restrictions are fueling domestic chipmaking in China.”
Nvidia's shares fell slightly above 3% in aftermarket trading.
We'll cut
Earlier this month, President Donald Trump confirmed that NVIDIA will pay the US 15% of its revenue from sales of certain AI chips to China.
Trump called Nvidia's H20 chips “outdated” despite previous targeting under export restrictions.
Beijing responded by expressing national security concerns about Nvidia chips and urging Chinese companies to rely on local semiconductor suppliers.
Nvidia has developed the H20 for export to China, addressing concerns that its top-tier chip could be used for rival countries' weapons development or AI applications.
“We are interested in our H20. We are ready to ship,” Nvidia CEO Jensen Huang said of the Chinese market, which is estimated to be a US$50 billion opportunity for NVIDIA this year.
“We are still waiting for some of the geopolitical issues that go back and forth between the government and their purchases and the companies they are trying to decide what they want to do.”
Huang said he is talking about the importance of Nvidia being able to compete with the Trump administration in China.
“We need to continue to assert the sensibility and importance of American high-tech companies to lead and win the AI race and allow us to build American technology into global standards,” says Huang.
Good luck with play
The revenue report comes amidst the market's concerns about the AI spending bubble that could burst and hurt the chip giant's fortune.
Nvidia served as a pioneer in the AI market, becoming the first company to reach a market value of $4 in July last year.
“We're just seeing huge interest in AI and demand for AI right now,” Huang said in a revenue call.
The top four cloud computing service providers are at a pace to spend around US$600 billion on AI infrastructure this year, and it's reasonable to think Nvidia is lined up for a lot of money, Huang reasoned.
-Agence France-Presse
