NVIDIA
The GPU tap is still very much on
Nvidia has raised its forecast for AI chip sales next year, expecting revenue to grow around 70% as demand for AI infrastructure stays strong.
The company made $96.2bn in revenue last quarter and expects about $108bn this quarter, both above Wall Street forecasts.
Amazon Web Services has also agreed to deploy another 2 million Nvidia GPUs.
But investors are looking more closely at how Nvidia is helping fund some of its own customers.
The company has invested in major AI firms including OpenAI and Anthropic, while also backing financing deals that help customers build data centres and buy more chips.
Critics say this could create a circular system where Nvidia helps fund customers that then spend money on Nvidia products.
Nvidia disagrees, saying demand remains strong and the risks are limited.
Its data centre business brought in $89bn last quarter, up 117% from a year earlier.
There are still some concerns. Nvidia expects profit margins to fall as memory shortages push up costs, while free cash flow dropped as some large customers took longer to pay.
In brief:
Nvidia expects sales to grow around 70% next year.
Data centre revenue reached $89bn, up 117% year on year.
Supplier commitments jumped to $279bn, mainly to secure more memory chips.
The numbers are deeply unserious
Nvidia’s results show AI infrastructure spending is still growing fast, but investors are watching how much of that demand Nvidia is helping to finance itself.
At this point Nvidia isn’t selling shovels in a gold rush. It’s also offering Klarna for the shovels.- MG