Despite the fact that the company reported a year-over-year decrease in revenue for its fourth quarter on Wednesday, shares of the graphics chip maker Nvidia (NVDA) rose by more than 14% on Thursday. This was despite the fact that the company reported the decline in revenue for its fourth quarter on Wednesday. What is the cause? A.I.
In particular, the excitement surrounding artificial intelligence applications such as ChatGPT, Microsoft’s Bing, and Google’s Bard. These apps all require heavy-duty processing power, which Nvidia’s chips are more than capable of providing thanks to their excellent design.
Jensen Huang, CEO of Nvidia, stated to analysts on the company’s earnings call that the graphics giant is at a “inflection point.” He also stated that artificial intelligence technologies and other technologies of a similar nature are comparable to the significance of the iPhone in the field of technology.
“ChatGPT reached 150 million people in 60, 90 days. I mean, this is quite an extraordinary thing,” “And people are using it to create all kinds of things. And so I think that what you’re seeing now is just a torrent of new companies and new applications that are emerging.”
It is not simply the capabilities of Nvidia’s hardware though, despite the fact that its highly-powered H100 platform is already being shipped to cloud-service providers. The company also stated that it will begin providing an option for cloud-based artificial intelligence as a service, which will enable smaller businesses to make use of Nvidia’s processing capacity for the purpose of training artificial intelligence models, such as the kind that drive ChatGPT.
Nevertheless, according to Brett Simpson, co-founder of Arete Research, it’s about more than just ChatGPT and similar services, as he said on Yahoo Finance Live.
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“Ultimately, the [computing] intensity of A.I. is far greater than conventional computing. So I think the revenue that’s associated with A.I. will be directly proportional to the computing opportunity here we see long term”
“The promise of this technology goes way beyond a chatbot so to speak.”