Nvidia‘s stock surged close to a $1 trillion market cap in extended trading Wednesday after it reported a shockingly strong forward outlook, and CEO Jensen Huang said the company was going to have a “giant record year.”
Sales are up because of spiking demand for the graphics processors (GPUs) that Nvidia makes, which power artificial intelligence applications like those at Google, Microsoft and OpenAI.
Demand for AI chips in data centers spurred Nvidia to guide for $11 billion in sales during the current quarter, blowing away analyst estimates of $7.15 billion.
“The flashpoint was generative AI,” Huang said in an interview with CNBC. “We know that CPU scaling has slowed, we know that accelerated computing is the path forward, and then the killer app showed up.”
Nvidia believes it’s riding a distinct shift in how computers are built that could result in even more growth — parts for data centers could even become a $1 trillion market, Huang says.
Historically, the most important part in a computer or server had been the central processor, or the CPU. That market was dominated by Intel, with AMD as its chief rival.
With the advent of AI applications that require a lot of computing power, the GPU is taking center stage, and the most advanced systems are using as many as eight GPUs to one CPU. Nvidia currently dominates the market for AI GPUs.
“The data center of the past, which was largely CPUs for file retrieval, is going to be, in the future, generative data,” Huang said. “Instead of retrieving data, you’re going to retrieve some data, but you’ve got to generate most of the data using AI.”
“So instead of millions of CPUs, you’ll have a lot fewer CPUs, but they will be connected to millions of GPUs,” he continued.
For example, Nvidia’s own DGX systems, which are essentially an AI computer for training in one box, use eight of Nvidia’s high-end H100 GPUs, and only two CPUs.
Google‘s A3 supercomputer pairs eight H100 GPUs alongside a single high-end Xeon processor made by…
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