Nvidia CEO Jensen Huang presents “Blackwell” at an event ahead of the Computex forum, in Taipei, Taiwan, on June 2, 2024.
Ann Wang | Reuters
Nvidia shares have surged 25% in the last month and are closing in on a record ahead of tech earnings season in the coming weeks, when top customers like Meta, Microsoft and Alphabet will update shareholders on their expected investments in artificial intelligence.
Following a brief but dramatic dip in late August and early September, Nvidia has rebounded sharply. The stock was down slightly on Wednesday at around $132, just shy of its closing high of $135.58 reached in July. Nvidia has surpassed Microsoft as the second-most valuable company, behind only Apple.
Nvidia has been the biggest beneficiary of the AI boom, as companies including Meta, OpenAI, Alphabet, Microsoft and Oracle continue to unveil technologies and products that require hefty investments in its graphics processing units (GPUs).
In August, Nvidia reported second-quarter earnings that showed revenue rose 122% year-over-year while net income more than doubled to $16.6 billion. The company also gave stronger-than-expected guidance for the current quarter and said it expects to ship several billion dollars worth of its new Blackwell AI chip. Demand is so high that Nvidia expects shipments for its current-generation Hopper chip to increase over the next two quarters.
“We see NVDA remaining the leader in the AI training and inference chips for Data Center applications, Mizuho analysts said in a note on Wednesday, estimating that the company has about 95% market share. The analysts have a $140 price target on the stock but noted risks in potentially escalating export restrictions to China, geopolitical tensions regarding Taiwan or a significant pullback in AI server spending.
“Everybody wants to have the most and everybody wants to be first,” CEO Jensen Huang said in an interview last week on CNBC’s “Closing Bell Overtime, speaking of the “insane” demand for the Blackwell chip. Production for the GPU, which will cost between $30,000 and 40,000 per unit, is expected to ramp up in the fourth quarter and continue into fiscal 2026.
The stock rallied for other reasons over the last month, too. Nvidia shares jumped 4% on Sept. 23, after a filing showed Huang finished selling the company’s stock.
— CNBC’s Michael Bloom contributed to this report.
Ryu Young-sang, CEO of South Korean telecoms giant SK Telecom, told CNBC that AI is helping telecoms firms improve efficiency in their networks.
Manaure Quintero | Afp | Getty Images
BARCELONA — Global telecommunications firms are talking up advances in key technologies like artificial intelligence as they look to transition away from being perceived as the “dumb pipes” behind the internet.
At the Mobile World Congress technology conference in Barcelona, CEOs of multiple telecoms companies described how they’re piling money into new technological innovations, including AI, next-generation 5G and 6G networks, satellite internet and even smart cities.
Makoto Takahashi, president and CEO of Japanese telecom giant KDDI, detailed plans to build a smart city dubbed Takanawa Gateway City in Tokyo, as well as roll out direct-to-cell satellite internet connectivity in partnership with Elon Musk’s Starlink venture.
Ralph Mupita, the CEO of Africa’s largest mobile network operator MTN, also took to the stage to share how the company has made significant strides toward becoming a company that offers both wireless connectivity and fintech services such as payments, e-commerce, insurance, lending and remittances.
“The telco business has served us well. It has iterated since. But the future is really about the future of platforms,” Mupita said in his keynote talk, adding the company has invested aggressively into other areas such as media streaming and financial services.
From ‘dumb pipes’ to ‘techcos’
Some lingo that has gathered steam in the telco industry for the last couple of years is the phrase “techco,” a portmanteau of the words “telco” and “tech.”
The term refers to the idea of a telco firm that operates more like a tech company — one that invests in cutting-edge technology and offers digital services to consumers to help them make money from the significant capital expenditures they’ve allocated to upgrading their wireless networks.
For two decades, tech giants such as Meta, Google, Amazon, Apple, Microsoft and Netflix have flourished in a world where content can be delivered directly to people’s devices, consumers can communicate seamlessly with one another, and data can be stored or streamed online without having to own cumbersome infrastructure — all thanks to innovations like the internet, smartphones and the cloud.
However, these innovations have disrupted telecom firms’ business models, to the point where they’re now often perceived as legacy players that are only there to lay down the cables and other network infrastructure that enable internet connectivity.
It’s a dilemma that’s earned telco brands the pejorative term “dumb pipes.”
“I remember early in the industry, even before mobile internet when SMS used to be the killer app,” Hatem Dowidar, CEO of UAE state-owned telecom company e&, said in a keynote speech at MWC. “We used to make messaging revenue. We used to make voice revenue.”
“All this over the years got disrupted by over-the-top players, to the point that today, a lot of telcos around the world are reduced to being a pipe of packets just getting data across the networks,” Dowidar added. “And competition is not staying still. They have the scale, they have the investment to go and disrupt even further.”
Telcos embrace AI
Ryu Young-sang, CEO of SK Telecom, told CNBC’s Arjun Kharpal that the South Korean telecoms giant has looked to AI technology to help it improve the efficiency of its wireless network — something that was consistently on display at numerous telco operators’ booths at MWC.
“For telcos, there are two aspects of AI. One is as a user, the other is as a supplier,” said Young-sang. “As a user, you are a telco business, you can improve your network efficiency, marketing and customer service by using the AI technology. You can improve your own operations.”
“The other aspect is, AI can be a growth engine, a new business opportunity for telcos,” he added. Data centers, the facilities that offer computing capacity needed to run generative AI applications like ChatGPT, are another key area where telcos like SK Telecom can play a key role, Young-sang said.
In the Western world, the race to build data centers is one that’s been mostly dominated by cloud computing giants — or “hyperscalers” — such as Amazon, Microsoft and Google. However, SK Telecom is aggressively expanding AI-ready data centers of its own globally, according to the firm’s CEO.
Can telcos catch up on tech?
For many telecom industry analysts, chatter about telcos seeking to transform themselves into tech players isn’t entirely new — companies in the industry have long been aware their relevance in communications and media has been dwindling.
Kester Mann, director of consumer and connectivity at market research firm CCS Insight, told CNBC that while he’s not a great fan of the “techco” term, it’s something the industry continues to focus on and has gathered pace in the context of the AI boom.
“AI can influence so many areas … and obviously that does play to that trend around telco to techco and operators positioning themselves more than just a connectivity provider,” Mann said.
So-called “autonomous networks,” or networks that can be managed and fixed with limited human oversight, is an area that’s quickly gaining traction in the industry, according to Nik Willetts, CEO of telco industry association TM Forum.
“Autonomous Networks is a movement we see moving from theory to reality incredibly quickly, thanks to advancements in AI combined with a new level of ambition and industry-wide action,” Willetts said.
This tech “can unlock a step-change in operating and capital efficiency, improving EBITDA and free cashflows, as well as unlocking new revenue opportunities and much-needed improvements in customer experience,” he added.
Jeetu Patel, chief product officer of IT networking giant Cisco, said he sees telcos playing a vital role as AI drives up demand for network traffic and bandwidth.
“The reality is this: the network bandwidth appetite is going to increase exponentially with AI,” Patel told CNBC. “Today, 100% of our workforce is human. Tomorrow, you will have that being augmented by AI agents, robots, humanoids, a lot of edge devices.”
“These agents are going to be more chatty and they’re going to require more network traffic and bandwidth,” he added. “I think service providers have a significant role to play. In my mind, the opportunity is not gone for them.”
China and the U.S. are in a race to create the first grid-scale nuclear fusion energy. After decades of U.S. leadership, China is catching up by spending twice as much and building projects at record speed.
Often called the holy grail of clean energy, nuclear fusion creates four times more energy per kilogram of fuel than traditional nuclear fission and four million times more than burning coal, with no greenhouse gasses or long-term radioactive waste. If all goes to plan, it will be at least a $1 trillion market by 2050, according to Ignition Research.
There’s just one big problem.
“The only working fusion power plants right now in the universe are stars,” said Dennis Whyte, professor of nuclear science and engineering at Massachusetts Institute of Technology.
The U.S. was first to large-scale use of fusion with a hydrogen bomb test in 1952. In the seven decades since, scientists around the world have been struggling to harness fusion reactions for power generation.
Fusion reactions occur when hydrogen atoms reach extreme enough temperatures that they fuse together, forming a super-heated gas called plasma. The mass shed during the process can, in theory, be turned into huge amounts of energy, but the plasma is hard to control. One popular method uses powerful magnets to suspend and control the plasma inside a tokamak, which is a metal donut-shaped device. Another uses high-energy lasers, pointed at a peppercorn-sized pellet of fuel, rapidly compressing and imploding it.
That’s how the U.S. pulled off the historic first fusion ignition, producing net positive energy at the Lawrence Livermore National Ignition Facility, or NIF, in 2022.
Here, the preamplifier module increases the laser energy as it heads toward the target chamber at the National Ignition Facitility.
Photo courtesy Damien Jemison at Lawrence Livermore National Laboratory
Since then, private investment in U.S. fusion startups has soared to more than $8 billion, up from $1.2 billion in 2021, according to the Fusion Industry Association. Of the FIA’s 40 member companies, 25 of them are based in the U.S.
Traditional nuclear power, created from fission instead of fusion, has seen a big uptick in investment as Big Tech looks for ways to fill the ever-increasing power needs of AI data centers. Amazon, Google and Meta have signed a pledge to help triple nuclear energy worldwide by 2050.
“If you care about AI, if you care about energy leadership … you have to make investments into fusion,” FIA CEO Andrew Holland said. “This is something that if the United States doesn’t lead on, then China will.”
Despite breaking ground on its first reactor nearly four decades after the U.S. pioneered the tech, China’s now building far more fission power plants than any other country.
China entered the fusionrace in the early 2000s, about 50 years after the U.S., when it joined more than 30 nations to collaborate on the International Thermonuclear Experimental Reactor fusion megaproject in France. But ITER has since hit major delays.
The race is on between individual nations, but the U.S. private sector remains in the lead. Of the $8 billion in global private fusion investment, $6 billion is in the U.S., according to the FIA.
Commonwealth Fusion Systems, a startup born out of MIT, has raised the most money, nearly $2 billion from the likes of Bill Gates, Jeff Bezos and Google.
Washington-based Helion has raised $1 billion from investors like Open AI’s Sam Altman and a highly ambitious deal with Microsoft to deliver fusion power to the grid by 2028. Google-backed TAE Technologies has raised $1.2 billion.
“Whoever has essentially abundant limitless energy … can impact everything you think of,” said Michl Binderbauer, CEO of TAE Technologies. “That is a scary thought if that’s in the wrong hands.”
When it comes to public funding, China is way ahead.
Beijing is putting a reported $1.5 billion annually toward the effort while U.S. federal dollars for fusion have averaged about $800 million annually the last few years, according to the Energy Department’s Office of Fusion Energy Sciences.
President Donald Trump ramped up support for nuclear, including fusion, during his first term, and that continued under former President Joe Biden. It’s unclear what fusion funding will look like in Trump’s second term, amid massive federal downsizing.
U.S. senators and fusion experts published a report in February calling for $10 billionof federal funds to help keep the U.S. from losing its lead.
But the U.S. may already have lost the lead when it comes to reactor size. Generally, the bigger the footprint, the more efficiently a reactor can heat and confine the plasma, increasing the chances for net positive energy.
A satellite image from January 11, 2025, shows a massive nuclear project in Mianyang, China, that appears to include four laser bays pointing at a containment dome roughly the size of a football field, about twice as big as the U.S. National Ignition Fusion Facility.
Planet Labs PBC
A series of satellite images provided to CNBC by Planet Labs shows the rapid building in 2024 of a giant new laser-fusion site in China. The containment dome where the fusion reaction will occur is roughly twice the size of NIF, the U.S. laser-fusion project, CNA Corporation’s Decker Eveleth said. The China site is likely a fusion-fission hybrid, FIA’s Holland said.
“A fusion-fission hybrid essentially is like replicating a bomb, but as a power plant. It would never work, never fly in a place like the United States, where you have a regulatory regime that determines safety,” Holland said. “But in a regime like China, where it doesn’t matter what the people who live next door say, if the government says we want to do it, we’re going to do it.”
China’s existing national tokamak project, EAST, has been setting records, volleying with France’s project WEST in the last couple months for the longest ever containment of plasma inside a reactor, although that’s a less monumental milestone than net positive energy.
Another huge state-funded Chinese project, CRAFT, is set to reach completion this year. The $700 million 100-acre fusion campus in eastern China will also have a new tokamak called BEST that is expected to be finished in 2027.
China’s CRAFT appears to follow a U.S. plan published by hundreds of scientists in 2020, Holland said.
“Congress has not done anything to spend the money to put this into action,” he said. “We published this thing, and the Chinese then went and built it.”
U.S. fusion startup Helion told CNBC some Chinese projects are copying its patented designs, too.
“China, specifically, we’re seeing investment from the state agencies to invest in companies to then replicate U.S. companies’ designs,” said David Kirtley, founder and CEO of Helion.
Manpower and materials
China’s rapid rollout of new fusion projects comes at a time when American efforts have largely been focused on upgrading existing machines, some of them more than 30 years old.
“Nobody wants to work on old dinosaurs, ” said TAE’s Binderbauer, adding that new projects attract more talent. “There’s a bit of a brain drain.”
In the early 2000s, budget cuts to domestic fusion research forced U.S. universities to halt work on new machines and send researchers to learn on other country’s machines, including China’s.
“Instead of building new ones, we went to China and helped them build theirs, thinking, ‘Oh, that’d be great. They’ll have the facility. We’ll be really smart,'” said Bob Mumgaard, co-founder and CEO of Commonwealth Fusion Systems. “Well, that was a big mistake.”
China now has more fusion patents than any other country, and 10 times the number of doctorates in fusion science and engineering as the U.S., according to a report from Nikkei Asia.
“There’s a finite labor pool in the West that all the companies compete for,” Binderbauer said. “That is a fundamental constraint.”
Commonwealth Fusion Systems SPARC tokamak being assembled in December 2024 in Devens, Massachusetts, is scheduled to use superconducting magnets to reach fusion ignition in 2027.
Commonwealth Fusion Systems
Besides manpower, fusion projects need a huge amount of materials, such as high power magnets, specific metals, capacitors and power semiconductors. Helion’s Kirtley said the timeline of the company’s latest prototype, Polaris, was set entirely by the availability of semiconductors.
China is making moves to corner the supply chain for many of these materials, in a similar play to how it came to dominate solar and EV batteries.
“China is investing ten times the rate that the United States is in advanced material development,” Kirtley said. “That’s something we have got to change.”
Shanghai-based fusion company Energy Singularity told CNBC in a statement that it “undoubtedly” benefits from China’s “efficient supply chain.” In June, Energy Singularity said it successfully created plasma in record time, just two years after beginning the design of its tokamak.
That’s still a far cry from reaching grid-scale, commercial fusion power. Helion aims to be first with a goal of 2028. Commonwealth has announced the site in Virginia where it plans to bring the first fusion power plant, ARC, online in the early 2030s.
“Even though the first ones might be in the U.S., I don’t think we should take comfort in that,” said MIT’s Whyte. “The finish line is actually a mature fusion industry that’s producing products for use around the world, including in AI centers.”
Silicon Valley’s earliest stage companies are getting a major boost from artificial intelligence.
Startup accelerator Y Combinator — known for backing Airbnb, Dropbox and Stripe — this week held its annual demo day in San Francisco, where founders pitched their startups to an auditorium of potential venture capital investors.
Y Combinator CEO Garry Tan told CNBC that this group is growing significantly faster than past cohorts and with actual revenue. For the last nine months, the entire batch of YC companies in aggregate grew 10% per week, he said.
“It’s not just the number one or two companies — the whole batch is growing 10% week on week,” said Tan, who is also a Y Combinator alum. “That’s never happened before in early-stage venture.”
That growth spurt is thanks to leaps in artificial intelligence, Tan said.
App developers can now offload or automate more repetitive tasks, and they can generate new code using large language models. Tan called it “vibe coding,” a term for letting models take the wheel and generate software. In some cases, AI can code entire apps.
The ability for AI to subsidize an otherwise heavy workload has allowed these companies to build with fewer people. For about a quarter of the current YC startups, 95% of their code was written by AI, Tan said.
“That sounds a little scary, but on the other hand, what that means for founders is that you don’t need a team of 50 or 100 engineers,” said Tan, adding that companies are reaching as much as $10 million in revenue with teams of less than 10 people. “You don’t have to raise as much. The capital goes much longer.”
The growth-at-all-costs mindset of Silicon Valley during the zero-interest-rate era has gone “out the window,” said Tan, pointing to a renewed focus on profitability. That focus on the bottom line also applies to megacap tech companies. Google, Meta and Amazon have gone through multiple rounds of layoffs and pulled back on hiring.
While that’s shaken some engineers, Tan described it as an opportunity.
It’s easier to build a startup, and the top people in tech don’t have to prove their worth by going to work at big tech companies, he said.
“There’s a lot of anxiety in the job market, especially from young software engineers,” Tan said. “Maybe it’s that engineer who couldn’t get a job at Meta or Google who actually can build a standalone business making $10 million or $100 million a year with ten people — that’s such a powerful moment in software.”
About 80% of the YC companies that presented this week were AI focused, with a handful of robotics and semiconductor startups. This group of companies has been able to prove earlier commercial use compared to previous generations, Tan said.
“There’s a ton of hype, but what’s unique about this moment is that people are actually getting commercial validation,” he said. “If you’re an investor at demo day, you’ll be able to call a real customer, and that person will say, ‘Yeah, we use the software every single day.'”
Y Combinator was founded in 2005 by Paul Graham, Jessica Livingston, Robert Morris and Trevor Blackwell. The firm invests $500,000 in startups in exchange for an equity stake. Those founders then enter a three-month program at the San Francisco headquarters and get guidance from partners and YC alumni. Demo day is a way to attract additional capital.
The firm has funded more than 5,3000 companies, which it says are worth more than $800 billion in total. Over a dozen of them are public, and more than 100 are valued at $1 billion or more. More than 15,000 companies apply to get into the accelerator, with about a 1% acceptance rate.
More of these venture capital incubators have popped up throughout the past decade, and more capital has flocked to early stage startups. Despite the competition, Tan argued that Y Combinator has an edge thanks to its strong network. He pointed to the number of highly valued portfolio companies rising, and pushed back on the idea that specialized incubators were taking business.
“About 20 to 30% of the companies during YC change their idea and sometimes their industry entirely. And if you end up with an incubator that is very specialized, you might not be able to change into the thing that you were supposed to,” Tan said. “We think that the network effects and the advantages of doing YC have only become more bold.”