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To a hammer, everything looks like a nail. For a flea manufacturer who feeds artificial intelligence, everything looks like a “token”. It is the jargon of the industry for the information units that an AI model takes and spits. The founder of Nvidia, Jensen Huang, thinks that the world is at the dawn of an explosion of token. The market capitalization of 3.3 TN of his business depends on it.
Nvidia said $ 44 billion in revenue in the three months that ended in April, 69% more than a year earlier, and more than analysts expected, according to LSEG. The company remains the largest beneficiary of the BOOM in AI, with low competition with regard to advanced flea – reflected in a gross margin of 71%.
It is not without hiccups. NVIDIA took a $ 4.5 billion following export edges which froze it outside China, a market that the company thinks could have represents $ 50 billion in annual income. Nvidia had already been forced by the White House for sale only a lesser version of its AI chips in the People’s Republic. The judgment would have been greater if Nvidia had not managed to reuse unbones elsewhere.
Fortunately, where a door closes, a window opens. Sales of the new Blackwell AI chips of the company are developing, apparently more quickly than expected. Morgan Stanley analysts, for example, expected the current quarter to end in July would bring in $ 43.5 billion in revenues, after losing $ 5 billion on expeditions to China. Instead, the company says it expects $ 45 billion, even after stripping a larger number of lost sales.
In addition, a new wave of AI factories arises to fill a hole in the shape of China. The large technological companies of the alphabet in Oracle already planned gigantic data centers, and now governments are embarking on the law. Saudi Arabia, the United Arab Emirates and Taiwan all accumulate in the “sovereign” AI supported by the State. Huang goes to Europe next week, a trip that could produce more major statements.
Then, there is the growth of the tokens – which means even more demand for chips – which comes from companies that find practical uses for increasingly complex models. The construction of the data center has already added 1 percentage point to American GDP in the first quarter, the strategists of Apollo Global Management Note. The launch of “reasoning” bots who think, check and check before responding can eventually use 1,000 times more data pieces per request than in simpler AI models, Huang maintains.
Will they all use Nvidia chips to do it? For the moment, it’s about the only match in town. The closest American rival Amd gathers a sixth of income. Cerebras, an ambitious advance abu Dhabi, leaves from a low base. And this gross greasy margin gives Nvidia a lot of firepower to compete on the price, if necessary. If the tokenization of everything continues its current rate, Nvidia has much more to execute.
John.foley@ft.com
