Nvidia Profits Soar On Demand For AI Power

Nvidia profits soar on demand for AI power

San Francisco, (APP - UrduPoint / Pakistan Point News - 23rd May, 2024) Nvidia said Wednesday its quarterly net profit rocketed by seven times year-on-year on demand for its chips to power artificial intelligence in data centers.

The California-based company reported a net profit of $14.9 billion, while its revenue of $26 billion was almost four times what it took in during the same fiscal quarter last year.

Nvidia also announced a 10-for-one stock split effective June 7 to make owning shares more accessible. Nvidia shares were up three percent to $977.99 in after-market trades.

"The next industrial revolution has begun," Nvidia chief executive Jensen Huang said in an earnings release.

"Companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center -- AI factories -- to produce a new commodity: artificial intelligence."

Demand was strong for sophisticated GPU (graphics processing units) tailored for the demands of training artificial intelligence models, according to Huang.

In a promising sign, interest in generative AI is expanding beyond cloud computing titans to consumer internet, automotive, and healthcare companies as well as nations seeking to build sovereign AI, Huang said.

"Nvidia defies gravity again as AI companies globally continue to depend on its chips, networking hardware, and its software ecosystem," said Emarketer senior analyst Jacob Bourne.

"We can expect that more bold innovative moves from Nvidia will help it maintain its industry position for the foreseeable future.


Wedbush analyst Ives said while artificial intelligence in businesses and cloud computing is driving huge demand for Nvidia systems, interest is on the horizon for consumer services offered by titans like Apple, Amazon, Meta, Google and microsoft.

- Europe cloud grows -

US tech colossus Amazon on Wednesday announced its cloud computing division AWS will invest 15.7 billion Euros ($17 billion) to expand its data centers in Spain's Aragon region through to 2033.

The move comes on the heels of its announcement this month of a 7.8 billion euro investment to build a cloud centre in Germany, and 1.2 billion euros in France to develop cloud infrastructure and logistical infrastructure of its parcel delivery service.

Huang has described Nvidia chips as being at the heart of datacenters transforming into "AI generation factories" with data a "raw material" turned into experiences such as prompt-generated videos made using OpenAI's new Sora tool.

In regions outside the United States, "sovereign AI" systems are adding to demand for Nvidia chips, according to Nvidia.

The chip maker's chief financial officer has described sovereign AI as a nation's ability to create and control its own artificial intelligence, Nvidia chief financial officer Colette Kress said on an earnings call.

Sovereign AI infrastructure is being built in Canada, France, Japan and many other countries, according to Huang.