Nvidia, the world’s largest supplier of chips used in data centres for training AI, has reported first-quarter revenue above Wall Street estimates, driven by increasing demand for AI services such as chatbots. Nvidia CEO Jensen Huang stated that the use of the company’s chips to power AI services “has gone through the roof in the last 60 days”, boosting the company’s outlook and driving up its shares by 8% in extended trading.
“AI is one of the few areas where tech companies are still spending even as the sector slashes jobs”, notes the article, with large tech firms such as Microsoft and Google investing in chat-powered search engines. Analysts believe Nvidia, which dominates roughly 80% of the market for graphics processing units used to speed up AI work, is best positioned to benefit from increased costs as companies race to imbue their search engines with chatbot technology.
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To capitalise on the growing AI market, Huang announced a new service in which Nvidia will directly offer its cloud computing service for companies to rent all of its technologies to develop their own “generative” AI services. Huang stated that the cloud-based offering would enable enterprises to accelerate the adoption of generative AI, which is “not deployed in enterprises broadly”. Nvidia’s revenue in the quarter ended on 29 January was $6.05bn, beating analysts’ average estimate of $6.01bn. The company forecast current-quarter revenue of $6.5bn, above analysts’ average estimate of $6.33bn.
