Nvidia Corp. Chief Executive Officer Jensen Huang, fresh off an upbeat quarterly report that sent his company’s to a record high, dispelled one of investors’ biggest concerns: that chip production won’t keep up with demand.
Though Nvidia didn’t give long-term projections Wednesday, Huang said that supply will “substantially increase for the rest of this year and next year.” The company relies on vendors such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. for components, and a lack of adequate inventory was seen as a challenge to its growth run.
In an interview Wednesday, Huang stressed that the company was doing everything it can to stay on top of surging demand.
“We’re focused on increasing our supply,” Huang said. “We have to do that with great urgency, and we are.”
Nvidia has a commanding lead in the market for artificial intelligence processors, which handle the heavy workloads needed to power tools like OpenAI’s ChatGPT. Its position has made it the world’s most valuable chipmaker — with a market capitalization above $1 trillion. And the shift to AI is only beginning, Huang said.
Accelerated computing, which speeds through specific tasks by breaking them up into smaller parts and working on them in parallel, is taking over, he argues.
“The big mega theme is that the world’s computer data centers are transitioning to a new model, from general purpose computing to accelerated computing,” he said. The Nvidia co-founder believes there’s a trillion dollars’ worth of data center infrastructure around the world that has to make this change. The company reported sales of $13.5 billion last quarter, more than double from a year earlier.
Heading into the latest earnings, “the biggest thing on everyone’s mind was supply,” said Chris Mack, an analyst at Harding Loevner, which owns Nvidia shares.
Without enough components, it would have taken Nvidia longer to fill orders — providing an entree for rivals such as Advanced Micro Device Inc. and Intel Corp. that are rushing to bring products to market. By increasing supply and meeting demand at a growing rate, Nvidia is helping keep customers hooked on its technology and reducing any tendency they have to look elsewhere, he said.
Huang aims to capitalize on the broad shift hitting the computing industry — something that doesn’t happen very often, he said. Such upheaval brings huge opportunities for companies that have the right products to exploit them, Huang said.
“Every 15 years, you see a new platform shift,” he said. “It’s happening right now in real time.”