Nvidia’s profit hits $58.3 billion as AI Boom gathers more Steam
Chipmaker Nvidia reported another huge quarterly profit on Wednesday, providing solid evidence that Silicon Valley’s artificial intelligence spending is still gaining steam.
Nvidia said profit reached $58.3 billion in the latest quarter, up 211 percent from a year earlier and beating analysts’ expectations. Just three years ago, the Silicon Valley company’s quarterly profit was $2 billion – about one-thirtieth of today’s profit.
Nvidia’s chips are an essential part of big AI projects, and other tech companies were about to spend tens of billions of dollars on these chips. Nvidia is now the most valuable publicly traded company in the world, and its financial results have become the crown jewel of the technology industry.
Nvidia’s biggest challenge appears to be meeting demand from its spendthrift tech industry customers, a strong indication that the AI boom is strong. On Wednesday, the company said annual spending on artificial intelligence infrastructure will reach $3 trillion to $4 trillion in 2030, up from about $1 trillion today.
It was the second quarter in a row that Nvidia’s profit doubled, and the second time the chip maker posted more profit than other tech giants like Apple. Revenue for the quarter was $81.6 billion, up 85 percent from a year earlier, also beating expectations.
Nvidia also reassured Wall Street about its future. The company had forecast revenue for the quarter to nearly double from last year to $91 billion. That beat Wall Street’s forecast of $86 billion. Nvidia’s share price fell 1 percent in after-hours trading, giving up most of its gains from earlier in the day.
The company’s CEO Jensen Huang said the construction of data centers, which he calls AI factories, has accelerated because “AI can now do productive and valuable work.”
“Demand has gone parabolic,” he said on a call with Wall Street analysts. “We’ve built ahead of this moment, so when agent AI arrives, Nvidia will be ready. It’s already here.”
More than a decade ago, Mr. Huang pushed his company, which made chips mostly used for video games, to develop software and chips for building artificial intelligence. His gamble helped Nvidia gain control of 90 percent of the market for high-end semiconductors that power artificial intelligence projects.
Nvidia’s sales were boosted by the tech giants’ belief that AI will usher in the next industrial revolution, with Google, Amazon, Meta, Microsoft and others committing at least $1 trillion to building AI data centers. These data centers are loaded with Nvidia chips.
Not surprisingly, data center sales now drive Nvidia’s business. In the most recent quarter, the company said data center revenue rose 92 percent to $75 billion — nearly all of its revenue for the period.
Mr. Huang said this week that new AI assistants known as agents are spurring further AI spending. This spending is starting to lift the entire chip industry.
AMD and Intel have increased sales of traditional server chips that can meet some AI queries. Cerebras, an AI chip startup, went public this month. And Google, which makes its own AI chips known as tensor processing units, has begun selling them to competitors.
“If you’re in an AI business, you’re going to take whatever chip you can get your hands on because the demand is so much more than you can handle,” said Daniel Pilling, portfolio manager at investment firm Sand Capital.
Nvidia responded to increased competition with new products. In March, it introduced an artificial intelligence system with technology it licensed from a startup called Groq. The product, which pairs Nvidia and Groq chips, more efficiently meets AI requirements through a process known as inference.
The chip maker has also started using its growing cash reserves to buy critical components and invest in start-ups. The company spent $95 billion in the previous quarter to secure the memory, fiber optics and other supplies it needs to build its AI supercomputers.
In February, it also invested in Anthropic, one of the fastest-growing AI companies in the world. Mr. Huang said Anthropic will start using more Nvidia chips.
But he failed to deliver on one of his top priorities: selling chips in China.
After the Trump administration banned sales to China last year, Mr. Huang convinced it to reverse course and allow Nvidia to sell its second-most powerful chip to Chinese companies. But China refused to let its companies buy Nvidia technology, instead forcing them to use domestic chip makers like Huawei.
This month, Mr. Huang traveled to Beijing on Air Force One with President Trump. He said he had not spoken to Chinese officials about the issue. He is optimistic that the situation will change.
“The Chinese government has to decide how much of its domestic market it wants to protect,” Mr Huang said on Bloomberg TV on Monday. “I feel like over time the market will open up.”