Nvidia founder and CEO Jensen Huang is, possibly, one of the greatest corporate hype men of all time on the comes of his company. He may even exceed Salesforce’s Marc Benioff when it comes to relentless optimism in his company’s future and revenues.
Even so, he delivers on the hype, quarter after quarter.
Despite cautioning you to view the proclamation that he’s found a “brand new $200 billion TAM for Nvidia” with skepticism, I’d argue he’s earned a bit of trust.
Huang placed this big new market at the feet of Nvidia’s latest CPU product, Vera, which was launched in March. Speaking on Wednesday’s earnings call — after Nvidia posted another record-breaking quarter with $81.6 billion in revenue and forecast $91 billion for the next — Huang pitched Vera as a probably transformative product. And one that already has promising sales figures.
But no matter how well Nvidia delivers, Wall Street harbors anxiety over what will knock Nvidia from its perch.
Lately, such fears have targeted at the CPU. Nvidia is the king of the GPU, whereas traditionally the CPU markets were owned by corporations like Intel and AMD. (Nvidia has made CPUs previously, of course, however that’s not its core business.)
For example, last month Amazon Web Services crowed about a large contract it signed with Meta for millions of Amazon’s homegrown AI CPUs. Amazon CEO Andy Jassy has been clear that he thinks AWS can do AI chips, each GPUs and CPUs, at least as well, and possibly better than Nvidia.
But now, with the Vera CPU, which is sold alone and bundled with its Rubin GPU, Huang believes he’s unlocked “a major new developed driver” for his company because Vera is, he believes, “the world’s first CPU, purpose-built for agentic AI,” Huang stated on the call.
“Vera opens a brand new $200 billion TAM for Nvidia, a market we’ve never addressed before, and every most important hyperscaler and system maker is partnering with us to deploy it. The world is rebuilding computing for agentic AI and robotic physical AI. Nvidia sits at the center of these transitions,” hype man Huang stated.
He explained that at the same time as the “thinking” a part of an AI model uses of GPUs, agents largely run on CPUs. They use CPUs to do their assigned tasks and will, he anticipate, run their own form of CPU-driven PCs.
Vera is for agents as it’s particularly designed to process tokens as quick as possible. This is opposed to classic cloud architecture CPUs designed with “cores,” or the ability to run more than one times of apps as quick as possible.
That sounds logical, moreover with the important cloud providersas well as startups seeking AI chip development, what makes him think that Nvidia will be the go-to source for agentic CPUs?
Due to, Huang says, Nvidia has already sold $20 billion worth of standalone Vera CPUs this year and we’re only at the starting.
“The world has billions customers, human users. My sense is that the world goes to have billions of agents, not today. I mean, we’re going to grow into it, but we’ll have billions of agents, and those billions of agents will all use tools. And those ones equipment are going to be like PCs, just like us humans using PCs todays,” he stated.
“We’re going to need a lot more CPUs,” he explained.
