The leather jacket-wearing CEO making billions off AI

“It’s too much,” Huang said during his presentation of the platform in Taiwan. “I know it’s too much.”

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Not everyone is bullish. In an interview on Bloomberg TV on Friday, Cathie Wood, whose flagship ARK Innovation ETF fund cut its holding in Nvidia in January, warned that the computer-chip industry’s boom-bust cycles pose risks. “There are a few reasons we take some pause,” she said, with competition growing among firms for a piece of the AI market. She called Nvidia a “a check-the-box stock.”

Huang has a knack for riding tech trends — selling graphics chips that powered everything from the video game boom to the rise of cryptocurrency and the industry’s big bet on the metaverse. But arguably no trend stands to benefit his company, today the world’s most valuable chip company, more than the rise of artificial intelligence.

Last week, the company issued an AI-fuelled sales forecast of $US11 billion in the fiscal second quarter, blowing Wall Street targets out of the water and growing its value by $US184 billion in a single day.

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“We have never seen a guide like the one Nvidia just put up,” Sanford C. Bernstein analyst Stacy Rasgon said at the time.

A 30-year journey

Nvidia was co-founded in 1993 by Huang. It proved more successful than its peers at developing chips that turn computer code into the realistic images that computer gamers love, and rode out a wave of consolidation that saw its rivals acquired, bankrupted or merged into larger companies.

Under Huang, the company then pushed its technology into new markets, such as data centre servers and artificial intelligence processing — a move that’s proving prescient today. In less than a decade, Nvidia’s data centre business has grown from $US300 million in annual revenue to $US15 billion. The chipmaker has won orders to equip giant computing factories by successfully arguing that graphics chips can handle AI workloads better than more standard processors.

It’s become commonplace for tech companies to talk up their artificial intelligence prospects during earnings conference calls.

References to AI soared after the launch of ChatGPT in November, and they don’t always spark a stock rally. But Nvidia has now become the model of a company that’s actually making money from AI. It’s the seller of picks and shovels in the gold-rush analogy.

Nvidia’s success has made investors even gloomier about Intel, a Silicon Valley pioneer and the company most synonymous with computer chips.

While many chipmakers saw their stocks gain in the wake of Nvidia’s blockbuster earnings last week, Intel actually fell. Nvidia’s valuation is now more than eight times that of Intel, despite the company having far less revenue.

Bloomberg

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