Nvidia CEO Jensen Huang’s big bet on A.I. is paying off as his core technology powers ChatGPT

Published

2 years ago

March 7, 2023

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For about a quarter century, Nvidia has been leading the revolution in computer graphics, becoming a beloved brand by gamers along the way.

Nvidia dominates the market for graphics processing units (GPUs), which it entered in 1999 with the GeForce 256. Gaming brought in over $9 billion in revenue for Nvidia last year despite a recent downturn.

But Nvidia’s latest earnings beat points to a new phenomenon in the GPU business. The technology is now at the center of the boom in artificial intelligence.

“We had the good wisdom to go put the whole company behind it,” CEO Jensen Huang told CNBC in an interview last month. “We saw early on, about a decade or so ago, that this way of doing software could change everything. And we changed the company from the bottom all the way to the top and sideways. Every chip that we made was focused on artificial intelligence.”

As the engine behind large language models (LLMs) like ChatGPT, Nvidia is finally reaping rewards for its early investment in AI. That’s helped to cushion the blow from broader semiconductor industry struggles tied to U.S.-China trade tensions and a global chip shortage.

Not that Nvidia is immune to geopolitical concerns. In October, the U.S. introduced sweeping new rules that banned exports of leading-edge AI chips to China. Nvidia counts on China for about one-quarter of its revenue, including sales of its popular AI chip, the A100.

“It was a turbulent month or so as the company went upside down to reengineer all of our products so that it’s compliant with the regulation and yet still be able to serve the commercial customers that we have in China,” Huang said. “We’re able to serve our customers in China with the regulated parts, and delightfully support them.”

AI will be a major focus of Nvidia’s annual GTC developer conference taking place from March 20-23. Ahead of the conference, CNBC sat down with Huang at Nvidia’s headquarters in Santa Clara, California, to discuss the company’s role at the heart of the explosion in generative AI.

“We just believed that someday something new would happen, and the rest of it requires some serendipity,” Huang said, when asked whether Nvidia’s fortunes are the result of luck or prescience. “It wasn’t foresight. The foresight was accelerated computing.”

GPUs are Nvidia’s primary business, accounting for more than 80% of revenue. Typically sold as cards that plug into a PC’s motherboard, they add computing power to central processing units (CPUs) built by companies like AMD and Intel.

Now, tech companies scrambling to compete with ChatGPT are publicly boasting about how many of Nvidia’s roughly $10,000 A100s they have. Microsoft said the supercomputer developed for OpenAI used 10,000 of them.

Nvidia Founder and CEO Jensen Huang shows CNBC’s Katie Tarasov a Hopper H100 SXM module in Santa Clara, CA, on February 9, 2023.

Andrew Evers

“It’s very easy to use their products and add more computing capacity,” said Vivek Arya, semiconductor analyst for Bank of America Securities. “Computing capacity is basically the currency of the valley right now.”

Huang showed us the company’s next-generation system called H100, which has already started to ship. The H stands for Hopper.

“What makes Hopper really amazing is this new type of processing called transformer engine,” Huang said, while holding a 50-pound server board. “The transformer engine is the T of GPT, generative pre-trained transformer. This is the world’s first computer designed to process transformers at enormous scale. So large language models are going to be much, much faster and much more cost effective.”

Huang said he “hand-delivered” to ChatGPT maker OpenAI “the world’s very first AI supercomputer.”

Not afraid to bet it all

Today, Nvidia is among the world’s 10 most valuable tech companies, with a market cap of close to $600 billion. It has 26,000 employees and a newly built polygon-themed headquarters. It’s also one of the few Silicon Valley giants with a founder of 30 years still at the helm.

Huang, 60, immigrated to the U.S. from Taiwan as a kid and studied engineering at Oregon State University and Stanford. In the early 1990s, Huang and fellow engineers Chris Malachowsky and Curtis Priem used to meet at a Denny’s and talk about dreams of enabling PCs with 3D graphics.

The trio launched Nvidia out of a condo in Fremont, California, in 1993. The name was inspired by NV for “next version” and Invidia, the Latin word for envy. They hoped to speed up computing so much that everyone would be green with envy — so they chose the envious green eye as the company logo.

Nvidia founders Curtis Priem, Jensen Huang and Chris Malachowsky pose at the company’s Santa Clara, California, headquarters in 2020.

Nvidia

“They were one among tens of GPU makers at that time,” Arya said. “They are the only ones, them and AMD actually, who really survived because Nvidia worked very well with the software community, with the developers.”

Huang’s ambitions and preference for impossible-seeming ventures have pushed the company to the brink of bankruptcy a handful of times.

“Every company makes mistakes and I make a lot of them,” said Huang, who was one of Time magazine’s most influential people in 2021. “Some of them put the company in peril, especially in the beginning, because we were small and we’re up against very, very large companies and we’re trying to invent this brand-new technology.”

In the early 2010s, for example, Nvidia made an unsuccessful move into smartphones with its Tegra line of processors. The company then exited the space.

In 1999, after laying off the majority of its workforce, Nvidia released what it claims was the world’s first official GPU, the GeForce 256. It was the first programmable graphics card that allowed custom shading and lighting effects. By 2000, Nvidia was the exclusive graphics provider for Microsoft’s first Xbox. In 2006, the company made another huge bet, releasing a software toolkit called CUDA.

“For 10 years, Wall Street asked Nvidia, ‘Why are you making this investment? No one’s using it.’ And they valued it at $0 in our market cap,” said Bryan Catanzaro, vice president of applied deep learning research at Nvidia. He was one of the only employees working on AI when he joined Nvidia in 2008. Now, the company has thousands of staffers working in the space.

“It wasn’t until around 2016, 10 years after CUDA came out, that all of a sudden people understood this is a dramatically different way of writing computer programs,” Catanzaro said. “It has transformational speedups that then yield breakthrough results in artificial intelligence.”

Although AI is growing rapidly, gaming remains Nvidia’s primary business. In 2018, the company used its AI expertise to make its next big leap in graphics. The company introduced GeForce RTX based on what it had learned in AI.

“In order for us to take computer graphics and video games to the next level, we had to reinvent and disrupt ourselves, change literally what we invented altogether,” Huang said. “We invented this new way of doing computer graphics, ray tracing, basically simulating the pathways of light and simulate everything with generative AI. And so we compute one pixel and we imagine with AI the other seven.”

‘Boom-or-bust cycle’

From the beginning, Huang was committed to making Nvidia a fabless chip company, or one that designs the product but contracts out production to others that have chip fabrication plants, or fabs. Nvidia keeps capital expenditure down by outsourcing the extraordinary expense of making the chips to Taiwan Semiconductor Manufacturing Company.

Taiwan Semiconductor Manufacturing Company’s U.S. office space in San Jose, CA, in 2021.

Katie Tarasov

Investors are right to be concerned about that level of dependence on a Taiwanese company. The U.S. passed the CHIPS Act last summer, which sets aside $52 billion to incentivize chip companies to manufacture on U.S. soil.

“The biggest risk is really U.S.-China relations and the potential impact of TSMC. If I’m a shareholder in Nvidia, that’s really the only thing that keeps me up at night,” said C.J. Muse, an analyst at Evercore. “This is not just a Nvidia risk, this is a risk for AMD, for Qualcomm, even for Intel.”

TSMC has said it’s spending $40 billion to build two new chip fabrication plants in Arizona. Huang told CNBC that Nvidia will “absolutely” use TSMC’s Arizona fabs to make its chips.

Then there are questions about demand and how many of the new use cases for GPUs will continue to show growth. Nvidia saw a spike in demand when crypto mining took off because GPUs became core to effectively competing in that market. The company even created a simplified GPU just for crypto. But with the cratering of crypto, Nvidia experienced an imbalance in supply and demand.

“That has created problems because crypto mining has been a boom-or-bust cycle,” Arya said. “Gaming cards go out of stock, prices get bid up, and then when the crypto mining boom collapses, then there is a big crash on the gaming side.”

Nvidia caused major sticker shock among some gamers last year by pricing its new 40-series GPUs far higher than the previous generation. Now there’s too much supply and, in the most recent quarter, gaming revenue was down 46% from a year earlier.

Competition is also increasing as more tech giants design their own custom-purpose chips. Tesla and Apple are doing it. So are Amazon and Google.

“The biggest question for them is how do they stay ahead?” Arya said. “Their customers can be their competitors also. Microsoft can try and design these things internally. Amazon and Google are already designing these things internally.”

For his part, Huang says that such competition is good.

“The amount of power that the world needs in the data center will grow,” Huang said. “That’s a real issue for the world. The first thing that we should do is: every data center in the world, however you decide to do it, for the goodness of sustainable computing, accelerate everything you can.”

In the car market, Nvidia is making autonomous-driving technology for Mercedes-Benz and others. Its systems are also used to power robots in Amazon warehouses, and to run simulations to optimize the flow of millions of packages each day.

Huang describes it as the “omniverse.”

“We have 700-plus customers who are trying it now, from [the] car industry to logistics warehouses to wind turbine plants,” Huang said. “It represents probably the single greatest container of all of Nvidia’s technology: computer graphics, artificial intelligence, robotics and physics simulation, all into one. And I have great hopes for it.”

Technology

How Facebook Marketplace is keeping young people on the platform

Published

12 hours ago

March 8, 2025

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How Facebook Marketplace is keeping young people on the platform

Meta‘s Facebook’s influence remains strong globally, but younger users are logging in less. Only 32% of U.S. teens use Facebook today, down from 71% in 2014, according to a 2024 Pew Research study. However, Facebook’s resale platform Marketplace is one reason young people are on the platform.

“I only use Facebook for Marketplace,” said Mirka Arevalo, a student at Buffalo University. “I go in knowing what I want, not just casually browsing.”

Launched in 2016, Facebook Marketplace has grown into one of Meta’s biggest success stories. With 1.1 billion users across 70 countries, it competes with eBay and Craigslist, according to BusinessDasher.

“Marketplace is the flea market of the internet,” said Charles Lindsay, an associate professor of marketing at the University of Buffalo. “There’s a massive amount of consumer-to-consumer business.”

Unlike eBay or Etsy, Marketplace doesn’t charge listing fees, and local pickups help avoid shipping costs, according to Facebook’s Help Center.

“Sellers love that Marketplace has no fees,” said Jasmine Enberg, VP and Principal Analyst at eMarketer. “Introducing fees could push users elsewhere.”

Marketplace also taps into the booming resale market, projected to hit $350 billion by 2027, according to ThredUp.

“Younger buyers are drawn to affordability and sustainability,” said Yoo-Kyoung Seock, a professor at the College of Family and Consumer Sciences at the University of Georgia. “Marketplace offers both.”

A key advantage is trust; users’ Facebook profiles make transactions feel safer than on anonymous platforms like Craigslist, according to Seock.

In January 2025, eBay partnered with Facebook Marketplace, allowing select eBay listings to appear on Marketplace in the U.S., Germany, and France. Analysts project this will drive an additional $1.6 billion in sales for eBay by the end of 2025, according to Wells Fargo.

“This partnership boosts the number of buyers and sellers,” said Enberg. “It could also solve some of Marketplace’s trust issues.”

While Facebook doesn’t charge listing fees, it does take a 10% cut of sales made through its shipping service, according to Facebook’s Help Center.

Marketplace isn’t a major direct revenue source, but it keeps users engaged.

“It’s one of the least monetized parts of Facebook,” said Enberg. “But it brings in engagement, which advertisers value.”

Meta relies on ads for over 97% of its $164.5 billion revenue in 2024.

“Marketplace helps Meta prove younger users still log in,” said Enberg. “Even if they’re buying and selling instead of scrolling.”

By keeping users engaged, Marketplace plays a key role in Facebook’s long-term strategy, ensuring the platform remains relevant in a changing digital landscape.

Watch the video to learn more.

Technology

Hinge Health to go public as soon as April, source says

Published

1 day ago

March 7, 2025

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Hinge Health to go public as soon as April, source says

Hinge Health’s TrueMotion feature.

Courtesy: Hinge Health

Digital physical therapy startup Hinge Health is gearing up to file for an initial public offering, potentially as soon as next week, CNBC has learned.

Hinge Health helps patients with musculoskeletal injuries ranging from minor sprains to chronic pain recover from the comfort of their own homes. Its IPO has been a highly-anticipated exit within the battered digital health sector, which has been reeling from the aftermath of the Covid-19 pandemic.

The IPO could happen as early as April, but timelines might still change due to uncertainty around tariffs, according to a person familiar with the matter. Hinge Health, which contracts with employers, generated $390 million in revenue in 2024, had $45 million in free cash flow and hit gross margins of about 78%, the person said.

The San Francisco startup has raised more than $1 billion from investors like Tiger Global and Coatue Management. Hinge Health had a $6.2 billion valuation as of October 2021. Physical therapy is estimated to be a roughly $70 billion market by the end of the decade.

A spokesperson for Hinge Health declined to comment.

Hinge Health CEO Daniel Perez and Executive Chairman Gabriel Mecklenburg co-founded the company in 2014 after they were frustrated by their own experiences with physical rehabilitation, according to the company’s website.

Members of Hinge Health can access virtual exercise therapy and an electrical nerve stimulation device called Enso that’s designed to serve as an alternative to pain medications like opiates. The company has been using generative artificial intelligence to scale its care team in recent years.

The company competes directly with other digital health startups like Sword Health, but Hinge Health is about four times larger than is closet competitor, the person said.

Investors will be watching closely to see whether Hinge Health’s IPO serves as a positive bellwether for the sector.

Bloomberg reported Hinge Health’s IPO plans earlier on Friday.

WATCH: The market is in a good environment for hedge funds, says Citi’s Mithra Warrier

Technology

Tesla shares have declined every week since Elon Musk went to Washington

Published

1 day ago

March 7, 2025

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Tesla shares have declined every week since Elon Musk went to Washington

Elon Musk speaks during the first cabinet meeting hosted by U.S. President Donald Trump, at the White House in Washington, DC, U.S., February 26, 2025.

Brian Snyder | Reuters

Tesla’s stock has never had a stretch this red.

For seven straight weeks, since Elon Musk went to Washington, D.C. to join the Trump administration, shares in his automaker have declined, closing on Friday at $270.48. It’s the longest such losing streak for Tesla in its 15 years as a public company.

Tesla shares finished the week down more than 10% and at their lowest level since Nov. 5, Election Day, when they closed at $251.44. Since the stock peaked at almost $480 on Dec. 17, Tesla has lost well over $800 billion in market cap.

Several Wall Street firms this week, including Bank of America, Baird and Goldman Sachs, cut their price targets on Tesla.

In slashing their target from $490 to $380, analysts at Bank of America cited concerns about the company’s falling new vehicle sales and the lack of a recent update from Musk on a “low-cost model.”

Goldman Sachs, which cut its price target on the stock to $320 from $345, also pointed to falling electric vehicle sales for Tesla in the first two months of the year across several markets in Europe, China and parts of the U.S.

The Goldman analysts noted that Tesla faces, “a tough competitive environment for FSD” in China, where key competitors “do not generally require a separate software purchase for smart driving features.” FSD, or Full Self-Driving (Supervised), is Tesla’s partially automated driving system, which the company sells as a premium option in the U.S.

Baird added Tesla to its “bearish fresh picks” this week, with analysts at the firm writing, “production downtime” will complicate “the supply-side of the equation” for Tesla as the company shifts to manufacturing the new version of its Model Y SUV.

Elon Musk stands as he is recognized by U.S. President Donald Trump during Trump’s address to a joint session of Congress at the US Capitol in Washington, DC, on March 4, 2025.

Saul Loeb | Afp | Getty Images

But Wall Street isn’t just concerned about fundamental metrics like sales and production figures. Investors are also trying to assess how much Musk’s politics and work in the White House will pressure Tesla, and for how long.

“Musk’s involvement with the Trump administration adds uncertainty to the demand-side,” Baird analysts wrote.

Before taking on his role as advisor to President Donald Trump, and the leader of the so-called Department of Government Efficiency (DOGE), Musk was already heading up his many private ventures, including artificial intelligence startup xAI, social media company X and aerospace and defense contractor SpaceX.

Concerned bulls

Now Musk, the world’s wealthiest person, has become the public face of the Trump administration’s effort to dramatically reduce the federal government’s workforce, spending and capacity. Meanwhile, he continues to post incendiary political rhetoric on X, slamming judges whose decisions he doesn’t like, and promoting false Kremlin talking points about Ukraine President Volodymyr Zelenskyy.

Anti-Musk and anti-Tesla sentiment have been rising in the U.S. and Europe, with an outburst of protests and suspected criminal acts of arson and vandalism at Tesla facilities.

Even the most bullish analysts, and many fans, have had to acknowledge the impact of Musk’s politics on the desirability of Tesla and its products to a wide swath of customers and investors.

EV advocates at Cleantechnica, which has long promoted Tesla on its site, ran an ethics-focused column on Thursday asking if Tesla owners should sell their cars, and contemplating whether the Tesla board should fire Musk as CEO.

Musk and Tesla didn’t immediately respond to requests for comment.

In a note out Friday, Wedbush Securities’ Dan Ives wrote, “Tesla bulls find themselves with their back against the wall facing global negative sentiment around Musk/DOGE and the Trump Administration.” He called it a “gut check moment for the Tesla bulls (including ourselves).”

Wedbush said it’s using the selloff as an opportunity to add Tesla to its “Best Ideas” list, and set its 12-month price target at $550.

“The best thing that ever happened to Musk and Tesla was Trump in the White House as this will create a deregulatory environment with a federal autonomous roadmap central to the Tesla golden strategic vision,” the firm wrote.

The Tesla bulls see the potential for the company to soon launch affordable new model EVs, a robotaxi and driverless ridehail service, and to deliver humanoid robots capable of factory work in the not-too-distant future. Ives said he expects Musk will become more focused on Tesla and his other companies in the second half of 2025.

Analysts at TD Cowen are also optimistic. In a note on Thursday, they wrote, “Tesla now appears to be in the early innings of a major 2025-26 product cycle, one that we believe could re-invigorate volume growth and boost overall share price sentiment.”

WATCH: Tesla has consequential catalysts beyond Q1