Chip giant Nvidia flouts AI scepticism with record revenue

Source: BBC Technology

Record Revenue

Chip giant Nvidia reported its fourth‑quarter revenue jumped by 73 % year‑on‑year to $68.1 bn (£50.2 bn), a record haul for the company. The figures beat analyst expectations and come amid a wave of investor scepticism toward the massive amounts of capital being spent on artificial intelligence (AI) technology.

AI Demand and Outlook

“Computing demand is growing exponentially,” CEO Jensen Huang said. “Our customers are racing to invest in AI compute — the factories powering the AI industrial revolution and their future growth.”

Nvidia provides chips for companies across the AI sector and has laid out plans to generate demand with new technologies of its own. The company reported total annual revenue of $215.9 bn for the past fiscal year and projected a rosy outlook for the months ahead.

Nvidia is the world’s most valuable publicly‑traded company, with a market cap of around $4.8 tn. It has become a central player in the build‑out of AI infrastructure, supplying sophisticated chips to leading AI model developers including OpenAI and Meta.

Gene Munster, managing partner at Deepwater Asset Management, wrote on X that “AI is accelerating faster than people not using these tools can grasp.” Critics, however, have raised the spectre of “circular financing” deals in which Nvidia’s investments in other companies may cloud perceptions about how robust AI demand really is.

Geopolitical Context

The outlook released by Nvidia on Wednesday did not include expectations about chip revenue in China. Last month, the U.S. administration began allowing Nvidia to sell its H200 chips—Nvidia’s second‑most advanced type—to Chinese customers under certain conditions. This week, a U.S. Commerce Department official told lawmakers that none of those chips have yet been sold to Chinese customers.

Product Expansion

Nvidia is expanding its product line to have more involvement in the physical products in which AI is embedded. At the CES technology trade show in Las Vegas, Huang unveiled a new tech platform for self‑driving cars. The open‑source AI model, called “Alpamayo,” is intended to bring reasoning capabilities to autonomous vehicles. Nvidia also announced plans to launch a robotaxi service by next year in partnership with an unnamed partner.

Acquisition

During the fourth quarter, Nvidia acquired rival Groq in a $20 bn deal to expand its expertise in inference—the process whereby a trained model is applied to real‑world data to generate answers through reasoning. While Nvidia chips dominate the training of AI models, the company faces increasing competition in the inference market.