From the Wall Street Journal via MSN, August 27:
Would there be an AI revolution if there were no Nvidia?
That’s what I found myself thinking as I listened to CEO Jensen Huang during the company’s earnings call yesterday after it reported a blowout quarter. Delivered in a just-the-facts tone even if it was peppered with words such as “extraordinary,” Huang made it clear that if you turn left or right, look up, down or under, you’re likely to find Nvidia in whatever part of the transformation you’re exploring.
There’s no doubt that we still don’t know how this all will play out. It is, of course, in Huang’s interest to emphasize his company’s role in the AI build-out. Nvidia also has a lot on the line through its role as the de facto banker/backer of many pieces of the revolution.
But even here, Huang expressed the kind of confidence that the market has appeared to be searching for, as some investors fretted over the gargantuan amounts of capital being bet to build the necessary compute. (Its stock was up nearly 5% in after-hours trading.)
Investing in companies including Anthropic and OpenAI is a “once in a generation opportunity,” he said. “I think the only regret that I have is that I didn’t invest more and sooner. And two of the companies will likely go public soon, and others will follow, and these will be some of the most consequential technology companies in history.”
Not only that, but they’re also Nvidia customers. “I have 100% confidence that you know through quite a long period of time they’re going to be utilizing Nvidia compute for a lot of their computing,” he added.
Huang noted more than once that capacity, not demand, is constraining Nvidia’s growth—it projected 70% revenue growth for fiscal 2028. What if there are no capacity constraints, he was asked.
“The unconstrained, you know, is significant, and so we’re just going to have to go work hard to get more capacity.” Thus its involvement in the AI supply chain that includes data centers.
The open versus closed AI models debate? Nvidia wins with both, he said....
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Regarding capacity constraints, here's the transcript:
....Tiffany, Conference Operator: Your next question comes from the line of James Schneider with Goldman Sachs. Your line is open.
James Schneider, Analyst, Goldman Sachs: Good afternoon. Thank you for taking my question. If you think about the 100% growth you talked about in terms of the plus unconstrained demand growth you are expecting, the 70% you expect to fulfill in terms of supply, can you maybe talk about some of the, or rank order some of the most acute constraints, whether that be things like data center, power and shell availability, DRAM, wafer foundry availability, et cetera? If you could maybe help us understand which are the biggest among those, that would be very helpful. Thank you.
Jensen Huang, President and Chief Executive Officer, NVIDIA: There’s something funny I could say, but I’m going to just not. Last year, one of the funnest things to do is just to go figure out where I go for dinner and who I have dinner with, and their stock price doubles the next day. I think the answer is, our entire supply chain is challenged. Everybody is really running flat out. More capacity is coming online all the time, which is one of the advantages of what’s going to happen this year. It’s not going to come online in an instance in time, but it’s going to come online every day. Yields are going to get improved. We’re going to be doing yield improvement. We’re going to work hard on working with every one of our suppliers.
We have a It’s not even next year yet, so we’ve got lots and lots of time to work hard every day. So at this moment, we have supply for 70%. We have more supply than 70%, but about 70%. Our demand is much higher than that, and we’ve got to go work hard, or we’re going to be disappointing customers. We like not to disappoint our customers, and we like to work hard for them. So I’m going to need the help of the entire supply chain to help me out here. They all know that. What I’m telling you about our needs for next year is exactly consistent with what I’ve told them. Everybody’s on the exact same song sheet, and I’m trying to be as transparent as we can because we’re talking about big numbers....
