Nvidia: As revenue soars, boss says AI is at a ‘tipping point’

The president of Nvidia, the world’s most valuable chipmaker, said artificial intelligence (AI) is at a “tipping point” as the company announced record sales.

The tech giant reported a 265% year-on-year increase in revenue to $22bn (£17.4bn) in the three months to 28 January.

For the year, sales more than doubled to $60.9 billion.

“Accelerated computing and generative AI have reached a tipping point,” said Nvidia CEO Jensen Huang.

“Demand is surging around the world, across companies, industries and nations.”

Nvidia also expects quarterly revenue to rise 233% this quarter, beating analyst expectations.

“There was a lot going on this quarter, but they really blew it away,” Technology Research’s Bob O’Donnell told the BBC.

“We’re starting to see mainstream use of AI,” he added, emphasizing that AI is no longer just used by specialized technology companies.

In addition to AI chips, the company’s data center sales are also growing rapidly.

The company’s data center business grew more than five times year over year and accounted for the majority of its revenue in the most recent quarter.

Nvidia announced that its gross profit increased 338% to $16.8 billion in the last three months of its fiscal year. Total profit for the year increased 188% to $44.3 billion.

However, the company said it faces several challenges, including supply chain constraints.

The United States has also tightened trade restrictions with China, the world’s second-largest economy.

Ipek Ozkardeskaya, a senior analyst at Swissquote, told the BBC that Nvidia’s performance was “extraordinarily surprising”.

But she added that Nvidia could face challenges in addition to regulations in China.

“NVIDIA…will face challenges along the way as its revenue growth stabilizes and the excitement around these growths and the perception of growth levels out,” she said.

Ozkardeskaya added that the company is also likely to face competition and regulatory issues that could “constrain its ability to meet this rapidly surging demand.”

The public profile of AI has skyrocketed since ChatGPT, developed by Microsoft-backed OpenAI, was announced in 2022.

ChatGPT and other similar systems use large amounts of data to create convincing, human-like responses to user queries.

These are expected to dramatically change the way people search for information online.

Nvidia’s stock market value rose 225% last year, making it one of the most valuable companies in the United States. The company’s stock rose more than 9% in extended trading in New York.