Nvidia has another record quarter amid record capex spends

Nvidia, the leading chip manufacturer and the world's most valuable company, announced astonishing profits for its latest quarter, driven by an unprecedented surge in demand for AI computing capabilities. CEO Jensen Huang highlighted this trend during an analyst call, stating, "The demand for tokens in the world has gone completely exponential." He noted that even their six-year-old GPUs in the cloud are now in high demand, leading to rising prices. The company reported an impressive $68 billion in revenue for the quarter, reflecting a 73% increase compared to the previous year. Of this total, $62 billion was derived from the data center division, which Nvidia has broken down into $51 billion in compute revenue—primarily from GPUs—and $11 billion from networking products including NVLink. Over the entire year, Nvidia's revenue reached $215 billion. Interestingly, Nvidia has not reported any revenue from chip exports to China, despite the recent easing of U.S. export restrictions. CFO Colette Kress pointed out that while a small quantity of H200 products for Chinese customers received U.S. approval, they have yet to generate any revenue. She expressed concerns about competitors in China, referring to the IPO of Moore Threads in December, and warned that they could potentially disrupt the global AI landscape in the long run. During the investor call, Huang discussed Nvidia's ongoing negotiations for a $30 billion investment in OpenAI, stating, "We continue to work with OpenAI toward a partnership agreement. We believe we are close." He also mentioned collaborations with Anthropic, Meta, and Elon Musk’s xAI. However, official documents filed with the U.S. Securities and Exchange Commission indicated that there is "no assurance" that this investment will materialize. Addressing concerns about the sustainability of tech companies' capital expenditures, Huang expressed confidence that these compute investments would soon yield revenue. He remarked, "In this new world of AI, compute is revenue. Without compute, there’s no way to generate tokens. Without tokens, there’s no way to grow revenues." Huang concluded by emphasizing that they have reached a pivotal moment, producing profitable tokens that benefit both customers and cloud service providers.