Jensen Huang said that the demand for Blackwell is "very, very high," and we are at the beginning of a new industrial revolution; he wants to be involved in almost everything Musk is participating in; the only regret about NVIDIA's investment in OpenAI is that they didn't invest more; he was surprised by AMD's agreement to give OpenAI up to 10% equity. When discussing the AI competition between China and the U.S., he believes that China is far ahead in energy infrastructure. On Wednesday, the media reported that xAI is seeking $20 billion in financing, and NVIDIA will invest $2 billion.
$NVIDIA (NVDA.US)$CEO Jensen Huang once again supports the view that demand for artificial intelligence (AI) is strong, and confirmed the news that NVIDIA has invested in Elon Musk's startup xAI.
In a media interview on Wednesday, October 8, Eastern Time, Jensen Huang stated that the demand for AI computing has significantly increased over the past six months, and the demand for NVIDIA's next-generation architecture Blackwell chips is "very, very high." He believes this marks the beginning of a "new round of industrial revolution." Regarding NVIDIA's investment in xAI, Huang expressed that the only regret is not having given Musk more investment.
After Jensen Huang mentioned the surge in AI demand, Nvidia's stock price reversed its three-day decline on Wednesday, rising more than 2% in early trading.
Regarding NVIDIA's competitors$Advanced Micro Devices (AMD.US)$This week, it was announced that a large-scale chip supply agreement has been reached with OpenAI. Huang Renxun described the deal as "clever" but surprising, as AMD provided OpenAI with warrants equivalent to 10% of AMD's equity. Regarding the $10 billion investment plan in OpenAI announced by NVIDIA two weeks ago, Huang Renxun expressed regret for not investing more.
Industry analysts predict that by 2026, global spending on AI infrastructure could reach $2 trillion. AI models are evolving from providing simple question-and-answer capabilities to possessing complex reasoning abilities, which is driving exponential growth in computing demand.
The demand for AI computing has surged, and Blackwell chips are in short supply.
This Wednesday, when asked what questions investors ask the most, Huang Renxun emphasized: "This year, especially in the past six months, computing demand has increased significantly."
Jensen Huang explained that AI inference models are using exponential computing power, but at the same time, there is also exponential growth in demand because their results are outstanding. He said, "AI is smart enough that everyone wants to use it. We are now seeing two exponential growths simultaneously."
NVIDIA's most advanced Blackwell graphics processing unit (GPU) is in particularly high demand. This chip features 208 billion transistors and new AI acceleration technology, making it a core support for data centers ranging from OpenAI's ChatGPT to other AI models.
Jensen Huang said, "The demand for Blackwell is extremely, extremely high," and also stated, "I believe we are at the beginning of a new round of construction, the beginning of a new industrial revolution."
NVIDIA announced last month that it plans to invest a total of $100 billion in OpenAI over the next decade to support OpenAI's deployment of NVIDIA systems that require 10 gigawatts of power, equivalent to 4 to 5 million GPUs.
NVIDIA is said to participate in the xAI funding round with $2 billion.
On Wednesday, media reports indicated that xAI is seeking to raise approximately $20 billion in funding, with Nvidia investing $2 billion. The financing includes equity and debt, using special purpose vehicles to purchase Nvidia processors and lease them to xAI for its Colossus 2 project.
The media has learned that xAI's financing will be divided into approximately $7.5 billion in equity and up to $12.5 billion in debt. Earlier this year, xAI raised about $10 billion through equity and debt financing, but given reports in June citing financial data that xAI is burning about $1 billion a month, the company still needs to secure several billion dollars in additional funding.
Jensen Huang confirmed to another media outlet on Wednesday that NVIDIA has invested in xAI, stating, "I am very excited about the financing opportunities they (xAI) provide. We are already investors in xAI, and my only regret about xAI is that we didn't give him (Musk) more funding."
Huang Renxun highly praised Musk's entrepreneurial experience, calling him$Tesla (TSLA.US)$The founder of SpaceX is skilled at creating transformative companies. He stated, "Almost everything Elon (Musk) is involved in, you really want to be a part of."
Regrettably, the investment in OpenAI is not enough; I believe Coreweave is an outstanding investment.
Regarding AMD's announcement on Monday of a long-term partnership agreement with OpenAI, Huang Renxun expressed surprise. According to the agreement, OpenAI has committed to purchasing 6 gigawatts (GW) of chips, including AMD's upcoming MI450 series, in exchange for which OpenAI will receive up to 160 million shares of AMD warrants.
Jensen Huang said, "Considering how excited they are about the next generation of products, this (agreement) is truly imaginative, unique, and surprising. I'm amazed that they gave up 10% of the company shares even before the product was developed. In any case, I think it's quite clever."
AMD's stock price has surged significantly since the announcement of the agreement, with a cumulative increase of 35% this week. This deal challenges NVIDIA's dominance in the AI chip industry.
Jensen Huang also expressed regret over NVIDIA's insufficient investment in OpenAI in the past. He said, "The only regret we have after investing in OpenAI is that we didn't invest more."
Jensen Huang stated that he believes cloud service providers$CoreWeave (CRWV.US)$It is one of NVIDIA's recent "outstanding investments." "They are truly special companies, they are building, they are part of our ecosystem, and they are constructing AI infrastructure for the world."
AI Competition: China Takes a Clear Lead in Energy Infrastructure
When discussing the landscape of AI competition, Jensen Huang noted that the U.S. currently has 'only a slight lead.' He pointed out that China is far outpacing the U.S. in its efforts to build the power infrastructure necessary for AI.
Jensen Huang stated, 'China is far ahead in terms of energy.' He believes the AI industry needs to develop new power generation capacity outside the existing grid to quickly meet demand while protecting consumers from rising electricity prices.
Huang suggested that data centers should be equipped with natural gas power generation equipment and may potentially use nuclear power in the future. He remarked, 'We should invest in almost every possible method of power generation. Self-generated power for data centers moves faster than relying on the grid — we must do this.'
Under an agreement with NVIDIA, OpenAI plans to build 10GW of data centers. This capacity is equivalent to the annual electricity consumption of 8 million American households or matches New York City’s peak baseline electricity demand in summer 2024, highlighting the immense energy demands of the AI industry.
AI Portfolio Strategist!One-click insight into holdings,Fully grasp opportunities and risks.
Editor/Joryn
