Nvidia reports exceptional sales spurred by demand for AI chips

24 Aug 2023

Image: © MichaelVi/Stock.adobe.com

CEO Jensen Huang said the Santa Clara-headquartered chipmaker expects to rake in $16bn in the current quarter as ‘the race is on to adopt generative AI’.

Nvidia says it has seen record sales of $13.51bn in its second fiscal quarter of the year, a whopping 101pc higher than the same period last year.

Driven largely by its data centre business, which is responsible for the Nvidia A100 and H100 chips crucial for generative AI, sales were also up 88pc over the previous quarter and beat Wall Street expectations by a significant margin.

The data centre business alone brought in $10.32bn, which is more than 140pc higher than the previous quarter and up 171pc over the same period last year.

“A new computing era has begun,” said Nvidia founder and CEO Jensen Huang. “Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI.”

According to Huang, Nvidia graphics processing units (GPUs) running the Santa Clara-based company’s CUDA AI software stack “make up the computing infrastructure of generative AI”.

Its chips are necessary to run some of the world’s leading generative AI tools – such as OpenAI’s ChatGPT – which have seen an exceptional boom in demand in recent months.

“During the quarter, major cloud service providers announced massive Nvidia H100 AI infrastructures. Leading enterprise IT system and software providers announced partnerships to bring Nvidia AI to every industry,” Huang added. “The race is on to adopt generative AI.”

Riding on this AI wave, the 30-year-old company now expects to rake in $16bn in sales in its third fiscal quarter, which is much higher than the $12.61bn forecast by Refinitiv and 170pc higher than the latest quarter.

Nvidia has been investing heavily in AI, making the most of a global surge in demand for its specialised chips. So much so that Nvidia became the first chipmaker to be valued at $1trn in May. This is despite a slump in the PC market and US chip export restrictions on China.

Also in May, Huang said Nvidia is building a new supercomputer that will help companies develop generative AI models. “Generative AI, large language models and recommender systems are the digital engines of the modern economy,” Huang said at the time.

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Vish Gain is a journalist with Silicon Republic