Jensen Huang, the CEO of the tech giant Nvidia, affirmed that the surge in spending on artificial intelligence chips is not over yet; in fact, it is set to expand even further over the next five years. The statements came at a time when investors' concerns are growing after the company disappointed expectations regarding third-quarter sales.
Despite the optimistic outlook, Nvidia's stocks (NASDAQ: NVDA) fell by 1.62% to $178.66 in pre-market trading on Thursday. The main reason is the company's exclusion of potential revenues from China from its forecasts, reflecting the ongoing uncertainty amid trade tensions between Washington and Beijing.
Huang tried to reassure investors worried about slowing growth, emphasizing that demand for Nvidia's chips will continue to be driven by tech giants and data center owners. He stated, "A new industrial revolution has begun. The race for artificial intelligence has already started." He added that the world could see spending ranging from $3 to $4 trillion on AI infrastructure by the end of the decade.
According to Huang, capital spending on data centers could reach $600 billion this year, with expectations that Nvidia alone will account for about $35 billion of any $60 billion data center project. He explained that the company is not facing a demand crisis; on the contrary: "All products are sold out."
For his part, Matt Orton, head of consulting solutions at Raymond James, noted that Nvidia is still experiencing strong growth due to massive spending from tech giants like Microsoft and Amazon, asserting that this AI-related business is robust and capable of sustaining itself.
Nevertheless, there are signs of fatigue in the stocks of AI-related companies, as Sam Altman, CEO of OpenAI, warned that investors might be "overly enthusiastic" about this technology.
Amid the ongoing debate, Huang remains optimistic, pointing out that the innovations offered by Nvidia are helping clients process vast amounts of data more efficiently while consuming less power, thus enhancing the company's growth prospects in a fierce global race for artificial intelligence.
