00:00 Speaker A
Nvidia’s role is clearly the biggest one, but I wonder if the AI tech industry is looking as good as ever as people try to find direction as to where the disruption is coming from and what it will impact. I think it’s not Nvidia. I’ll be the first to get your opinion on whether you think Nvidia is still good weather, but if not Nvidia, where should we look in that direction? So we ended up with
00:27 Speaker A
Citorini’s thought exercise, right? But I’m not sure what to do with something concrete to indicate whether things are messed up or not. Ruben, I’ll go first on that.
00:43 ruben
Well, Gal and I are going to agree with most of what I say here. And I think Nvidia is absolutely fine weather. Gal’s point is that this is not just a GPU issue. It is a platform solutions company that drives innovation across the AI infrastructure stack. They are building an AI factory that includes computing, networking, and software across the stack to drive innovation across the universe.
01:13 ruben
Thanks to Nvidia, innovation in network standards is accelerating. Thanks to Nvidia, processor development cycle times are getting faster. And I think, you know, that’s going to continue and, again, this is the company that has the largest R&D budget, using R&D budget and cash flow. So last year’s cash flow was close to $100 billion, and this year’s cash flow will likely be well over $100 billion.
01:36 ruben
In addition to investing in the AI ecosystem, we also invest in assistive technology. They recently made an acquisition, uh, I think to add more potential areas of innovation around the, uh, AI infrastructure stack that they’re building. And I think that’s going to continue and other parts of the industry will be driven around AI. So we absolutely think Nvidia will continue to be the best weather when talking about AI.
02:03 Speaker A
What do you think, Gal? Do you agree with everything Ruben says?
02:08 gal
I agree in the sense that Nvidia gets most of the profits. AI The adoption of AI technology is actually being carried out by only a handful of companies. TSMC, Nvidia, and Microsoft, Amazon, and Google. Now, AI trading has expanded significantly to include these companies, memory companies, and optical companies. So it’s no longer a situation where Nvidia is the only factor determining the fate of the AI trade. I think that has already passed.
02:38 gal
And in fact, I think investors are pretty much aware that Nvidia knows what it’s going to report about a month before Microsoft, Amazon, Google, and Meta do. As a matter of fact, we’ve known about this positive outcome for a month because all these companies were telling us they were going to increase their capbacks. And they are what we will learn about the successes of AI.
03:00 gal
Through Gemini and Open AI, they have all their customers, including business customers as well as consumers. So the fact that they’re telling us that they’re not only continuing to build data centers, but also increasing their capital spending, tells us that they recognize the demand. They believe that companies are using AI and are committed to using AI for three to five years, and that’s why they’re building data centers.
03:22 gal
And they’re seeing consumers increasingly use and be willing to pay for these tools from Open AI, Anthropic, and Gemini. You can see this with the growth of Open AI and Anthropic, which is completely unprecedented. Despite the fact that these companies now generate revenues of $15 billion to $20 billion a year, they still triple in revenue. In other words, this is where the success of AI can be seen.
03:46 gal
The growth of these companies and the continued efforts by data center adopters to continue building their AI computing capabilities.
