Nvidia’s second-quarter earnings, reported Wednesday after the market closed, prove that there is money to be made — and a lot of it — by selling the picks and shovels of the generic AI boom.
“A new computing era has begun. Companies around the world are making the transition to general-purpose accelerated computing and generative AI, Nvidia founder and CEO Jensen Huang said in a statement.
Huang is not wrong. Nvidia has become the main supplier of generic AI to the industry. The company’s A100 and H100 AI chips are used to build and run AI applications, most notably OpenAI’s ChatGPT. The demand for these demanding applications has grown steadily over the past year, and the infrastructure is shifting to support them.
Several cloud service providers recently announced plans to adopt Nvidia H100 AI hardware in their data centers, according to Huang, adding that enterprise IT systems and software providers have also partnered to bring Nvidia AI to every industry. has announced.
“The race to adopt generative AI is on,” he added.
Nvidia reported revenue of $13.51 billion in the second quarter, a figure that crushed Wall Street’s expectations and more than doubled the $6.7 billion it generated in the same period last year. Analysts polled by Yahoo Finance expect second-quarter revenue of $11.22 billion.
Nvidia reported GAAP net income of $6.18 billion, compared to $656 million earned in the same period a year ago – more than nine times profit. Nvidia’s net income also skyrocketed from the first quarter when it reported revenue of $2.04 billion. Its earnings per diluted share for the quarter were $2.48, up 854% from the same period last year. Analysts polled by Yahoo Finance had expected earnings of $2.09 per share.
The results show how dramatically its business has changed. The company’s gaming unit was once its main driver of revenue. And while gaming is growing — its second-quarter revenue was $2.49 billion, up 22% from last year — it’s now having an impact on its data center unit. Nvidia’s data center business generated revenue of $10.32 billion, up 141% from the previous quarter and up 171% from a year earlier.
Huang said during a keynote speech at SIGGRAPH in Los Angeles earlier this month that the company made an existential business decision in 2018 to adopt AI-driven image processing in the form of ray tracing and intelligent upscaling: RTX and DLSS. Had taken.
That bet was successful. And Nvidia forecasts even more growth.
The company forecast revenue of $16 billion, plus or minus 2%, for the third quarter.
“There are about a trillion dollars worth of data centers in the world installed in the cloud,” Huang said during the company’s earnings call on Wednesday. “And that trillion dollar data center is in the process of being converted to accelerated computing and generative AI. We’re seeing two platform changes happening at the same time.”
He said that accelerated computing is now the most cost-effective, most energy-efficient and most performant way of computing. Now, along comes generative computing, enabled by AI.
“This incredible application now gives everyone two reasons to transition from general purpose computing – the classical way of doing computing – to this new way of doing computing accelerated computing,” he said.
Source: techcrunch.com
