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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’

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.”

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Elon Musk’s xAI Holdings in talks to raise $20 billion, Bloomberg News reports

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Elon Musk's xAI Holdings in talks to raise  billion, Bloomberg News reports

The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)

Nurphoto | Nurphoto | Getty Images

Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.

The funding would value the company at over $120 billion, according to the report.

Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.

The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.

Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.

Faber Report: Elon Musk held call with current xAI investors, sources say

The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.

“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”

Read the full Bloomberg story here.

— CNBC’s Samantha Subin contributed to this report.

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Alphabet jumps 3% as search, advertising units show resilient growth

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Alphabet jumps 3% as search, advertising units show resilient growth

Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.

David Paul Morris | Bloomberg | Getty Images

Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.

GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”

The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.

Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.

Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.

Read more CNBC tech news

Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.

During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.

Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.

Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.

Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.

“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.

WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard

Gemini delivering well for Google, says Check Capital's Chris Ballard

CNBC’s Jennifer Elias contributed to this report.

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Amazon sellers raise prices after Trump’s China tariff: ‘It’s unsustainable’

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Amazon sellers raise prices after Trump's China tariff: 'It's unsustainable'

An Amazon employee works to fulfill same-day orders during Cyber Monday, one of the company’s busiest days at an Amazon fulfillment center on December 2, 2024 in Orlando, Florida. 

Miguel J. Rodriguez Carrillo | Getty Images

For 10 years, Aaron Cordovez has been selling kitchen appliances on Amazon. Now he’s in a bind, because most of his products are manufactured in China.

Cordovez, co-founder of Zulay Kitchen, said his company is moving “as fast as we can” to move production to India, Mexico and other markets, where tariffs are increasing under President Donald Trump, but are mild compared with the levies imposed on goods from China. That process will likely take at least a year or two to complete, he said.

“We’re making our inventory last as long as we can,” Cordovez said in an email.

Zulay is also temporarily raising the price of some of its milk frothers, smores roasting sticks and other products. The company’s popular kitchen strainer now costs $12.99, up from $9.99 before Trump announced his sweeping tariff proposal earlier this month.

Amazon merchants are hiking prices for everything from diaper bags and refrigerator magnets to charm necklaces and other top-selling items as they confront higher import costs. E-commerce software company SmartScout tracked 930 products on Amazon that have seen increased prices since April 9, with an average jump of 29%.

The price hikes affect a range of categories, including clothing, jewelry, household items, office supplies, electronics and toys.

The trade war with China has threatened to upend sellers on Amazon’s third-party marketplace, which accounts for about 60% of the company’s online sales. Many merchants are based in China or rely on the world’s second-largest economy to source and assemble their products.

Sellers are now faced with the conundrum of raising prices or eating the extra costs associated with Trump’s new tariffs. It’s an existential threat for many sellers, who subsist on razor-thin margins and have, for the last several years, dealt with rising costs on Amazon tied to storage, fulfillment, shipping and advertising fees along with pricing pressure from increased competition.

CEO Andy Jassy told CNBC earlier this month that the company was “going to try and do everything we can” to keep prices low for shoppers, including renegotiating terms with some of its suppliers. But he acknowledged some third-party sellers will “need to pass that cost” of tariffs on to consumers.

Amazon’s stock price is down 15% so far this year, sliding along with the broader market. The company reports first-quarter earnings next week.

Watch CNBC's full interview with Amazon CEO Andy Jassy

Goods imported from China now face import duties of 145%, though Trump said Wednesday his administration is “actively” talking with China about a potential deal to lower tariffs. Chinese officials on Thursday denied that trade talks are taking place.

About 25% of the price increases observed by SmartScout were initiated by sellers based in China, said Scott Needham, the company’s CEO. Last week, stainless steel jewelry maker Ursteel hiked prices on four of its products by $6.50, while apparel brand Chouyatou raised the price of some of its dresses by $2. Both businesses are based in China’s Zhejiang province.

Anker, a Chinese electronics brand and one of Amazon’s largest sellers, has raised prices on one-fifth of its products sold in the U.S., including a portable power bank, which went up to $135 from $110, SmartScout data shows.

Representatives from Anker, Ursteel and Chouyatou didn’t respond to requests for comment.

Zulay, headquartered in Florida, is one of many U.S.-based sellers raising prices. The company is also cutting costs. Cordovez said he’s been forced to lay off 19% of his workforce and slash online ad spending by 85%.

Desert Cactus, based in Illinois, is also taking action. Joe Stefani, the company’s president, has been looking to move production of some of his brand’s college-themed merchandise out of China and into Mexico, India and Vietnam. About half of Desert Cactus’ goods come from China, while the rest are made in the U.S., Stefani said.

An Amazon worker moves a cart filled with packages at an Amazon delivery station in Alpharetta, Georgia, on Nov. 28, 2022.

Justin Sullivan | Getty Images

One of the company’s top products is a customizable license plate frame that’s manufactured in China. At the start of Trump’s first term in 2016, Stefani’s company paid import and shipping fees of 4% on the license plates. That rate has since skyrocketed to 170%, he said.

“The tariffs can’t stay this high,” Stefani said. “There’s so many people that just aren’t going to make it.”

Stefani said he expects Desert Cactus will end up raising prices on some products, though he’s worried shoppers might be put off by sticker shock.

“Will someone be willing to pay $50 for a hat on Amazon?” Stefani said. “You know it’s going to be expensive at the ballpark, but on Amazon we don’t know.”

Dave Dama, co-founder of health and beauty business Pure Daily Care, said the price to manufacture one of his skin-care products in China jumped to $25 from $10. Most Amazon sellers will have no choice but to raise prices, he said.

“If you were selling something for $40 and making a $7 or $8 profit at the end of the day, with these tariffs, those days are gone,” Dama said. “You can’t do that anymore. It’s unsustainable.”

Pure Daily Care plans to stagger price increases over several weeks, and only on products “we absolutely need to,” to keep Amazon’s algorithms from ranking it lower in search results or losing the valuable buy box, he said. The buy box determines which listing pops up first when a shopper clicks on a particular product, and the one that gets purchased when they tap “Add to Cart.”

An Amazon spokesperson said the company’s pricing policies continue to apply.

“As always, sellers set their own prices, and we regularly monitor how we highlight great prices as Featured Offers to provide customers with low prices across a wide selection,” the spokesperson said in a statement.

Dama said his company has enough inventory for some products to last up to six months, which it aims to “stretch as long as possible” in the hope that China and the U.S. can reach a trade deal. The company is also forgoing some sales promotions and discounts, while pausing spend on some display and video ads.

Regarding his inventory, Dama said, “We can try to stretch that seven, eight, nine months, which buys us a lot more time for this thing to work out, hopefully.”

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Trump tariffs are raising prices on Amazon and threatening to ruin U.S. sellers who source in China

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