Nvidia’s AI revolution: Set to dominate chip industry by 2025

Nvidia CEO Jensen Huang emphasised that nations worldwide, including India, Japan, France, and Canada, expressing interest in developing sovereign artificial intelligence capabilities, will boost demand for Nvidia’s products. In an interview with Bloomberg Television, Huang highlighted the global recognition of the importance of refining and producing AI capabilities locally, with an increasing focus on securing and utilising data within national borders. He noted that as countries invest in their AI infrastructure, there will be a growing need for data centres and supercomputers, presenting an opportunity for Nvidia’s expertise and hardware. The chipmaker, already enjoying substantial growth from major customers like Microsoft, Meta Platforms, Amazon, and Alphabet, aims to expand its customer base by encouraging corporations and government agencies to build their AI infrastructure. As generative AI technology influences every country, Nvidia anticipates significant global market expansion, potentially making it the leading revenue-generating company in the chip industry by 2025.

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By Ian King and Ed Ludlow

Nvidia Corp. Chief Executive Officer Jensen Huang said countries around the world aiming to build and run their own artificial intelligence infrastructure at home will drive up demand for his company’s products.

Nations including India, Japan, France and Canada are talking about the importance of investing in “sovereign AI capabilities,” Huang said in an interview Thursday with Bloomberg Television. “Their natural resource – data – should be refined and produced for their country. The recognition of sovereign AI capabilities is global.”

At the time of the interview, Huang was in Canada, which itself is home to a number of academic institutions that have significantly contributed to breakthroughs in the type of generative AI systems that power tools such as OpenAI’s popular ChatGPT. The country now finds itself with a growing need for the supercomputers necessary to capitalize on the work of its academics, he said.

Huang, who co-founded the chip designer Nvidia, has been talking for months about the need for countries and their companies to keep precious data and the intelligence that can be extracted from it local. Such a national approach to the AI boom stands to drive an expansion of data centers that would need Nvidia’s know-how and hardware.

The world’s most valuable chipmaker is estimated to have doubled its sales in the fiscal year, driven by the AI spending of its biggest customers such as Microsoft Corp. Meta Platforms Inc., Amazon.com Inc. and Alphabet Inc. Huang now wants to expand his customer base by persuading corporations and government agencies to build their own infrastructure.

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“The vast majority of the computing market has been in the US, and to a much smaller degree, China,” he said. “For the very first time, because of generative AI computer technology, it’s going to impact literally every single country. So some of the markets will be quite large and global.”

Nvidia, which has become Wall Street’s favorite bet on AI, has managed to exceed analysts’ expectations for the past few quarters of earnings, and it may need to find new markets to maintain that streak. Other tech companies that have been associated with the AI boom over the past year, such as chip-making rival Advanced Micro Device Inc., have posted earnings and outlooks this quarter that disappointed investors.

Nvidia may prove the exception. It’s arguably the only tech company that has demonstrated significant revenue growth from AI that has already transformed the chip supplier from a niche player to the biggest beneficiary of the AI boom. Analysts are projecting that the surge in demand for Nvidia’s products will turn it into the biggest company by revenue in the chip industry as early as 2025.