Nvidia CEO Jensen Huang on Monday laid out his vision to keep his company at the forefront of the artificial intelligence boom, which he predicted will create a $1 trillion order backlog in the coming year.
Dressed in his signature black leather jacket, Huang spent more than two hours strolling around a stage in a packed arena in San Jose, California, explaining how Nvidia’s processors became indispensable AI components and highlighting the products he believes will keep the company going.
Huang, 63, also touched on many of the themes he’s been pushing since becoming one of Silicon Valley’s most influential voices in recent years, including his contention that the build of AI is still in its infancy.
“We have reinvented computing, just like the PC (personal computer) revolution and the Internet revolution,” Huang proclaimed. “We are now at the beginning of a new platform change.”
Making his points, Huang predicted that Nvidia will be struggling with a $1 trillion backlog of orders for its chips by the end of the year, doubling his estimate from a year ago.
Nvidia has leveraged its dominant position in the AI chip market so far to increase its annual revenue from $27 billion in 2022 to $216 billion last year — a growth rate that has translated into a $4.5 trillion market value for the Santa Clara, California-based company.
But Nvidia’s once scorching share price has cooled since the company briefly became the first to adopt the A Market value of $5 trillion last October amid concerns that the AI buzz is overblown.
“This is just a period of turmoil for the tech industry,” said Wedbush Securities analyst Dan Ives.
Even after Nvidia came out a quarterly report at the end of February that easily exceeded analyst expectations and provided management with a rosy outlook, the company’s share price is still 6% lower than where it was before these figures were released. After Huang’s revelation about an expected doubling of backlogged chip orders, Nvidia shares rose nearly 2% to close Monday at $183.22.
While analysts expect Nvidia’s revenue to exceed $330 billion in the coming year, the company is facing its first serious challenges in the AI chip market as other tech powerhouses such as Google and Facebook’s parent company Meta Platforms try to develop their own processors.
Nvidia’s potential growth has been hampered by security and trade barriers imposed by the US, which have hampered the company’s ability to sell its advanced chips in China.
Huang predicts that Nvidia will maintain its instrumental role in AI by continuing to fuel the feverish demand for chips that power chatbots like OpenAI’s ChatGPT and Google’s Gemini and expanding its reach into the emerging market for inference processors.
Once an AI tool is trained, inference chips allow the technology to use what it has learned and produce answers – whether writing a document or creating an image – more efficiently than the processors used while building the large language models.
“The inference has arrived,” Huang said.
To help navigate the transition into the inference field, Nvidia struck a multi-billion dollar licensing deal with market specialist Groq, including the recruitment of that startup’s top engineers.
“Nvidia is not going to give up any market share to Google or Meta,” said Ives, who believes Nvidia’s market value will surpass $6 trillion in the next year.
