Nvidia chief sees rise of ‘sovereign AI’ infrastructure across nations, driving demand for company’s advanced chips

Nations including India, Japan, France and Canada are talking about investing in ‘sovereign AI capabilities’, Nvidia’s Jensen Huang said
A national approach to the artificial intelligence boom stands to drive an expansion of data centres that would need Nvidia’s know-how and hardware

Artificial intelligence

Bloomberg

Published: 3:52pm, 2 Feb 2024

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Nvidia Corp chief executive Jensen Huang said countries around the world aiming to build and run their own artificial intelligence (AI) infrastructure at home will drive up demand for his company’s products.

Nations including India, Japan, France and Canada are talking about the importance of investing in “sovereign AI capabilities”, Huang said in an interview on Thursday with Bloomberg Television. “Their natural resource – data – should be refined and produced for their country. The recognition of sovereign AI capabilities is global”.

At the time of the interview, Huang was in Canada, which itself is home to a number of academic institutions that have significantly contributed to breakthroughs in the type of generative AI systems that power tools such as OpenAI’s popular ChatGPT.

Canada now finds itself with a growing need for the supercomputers necessary to capitalise on the work of its academics, he said.

Jensen Huang, co-founder and chief executive of Nvidia Corp, arrives at an event in Taipei, Taiwan, on January 25, 2024. Photo: Bloomberg

Huang, who co-founded semiconductor design firm Nvidia, has been talking for months about the need for countries and their companies to keep local the precious data and intelligence that can be extracted from AI systems.

Such a national approach to the AI boom stands to drive an expansion of data centres that would need Nvidia’s know-how and hardware.

The world’s most valuable chip maker is estimated to have doubled its sales in the financial year, driven by the AI spending of its biggest customers such as Microsoft Corp, Facebook parent Meta Platforms, Amazon.com and Google owner Alphabet.

Huang now wants to expand his company’s customer base by persuading corporations and government agencies to build their own AI infrastructure.

A sign on a window reading “Your AI Was Innovative And Inclusive?” is seen on day three of the World Economic Forum in Davos, Switzerland, on January 18, 2024. Photo: Bloomberg

“The vast majority of the computing market has been in the US, and to a much smaller degree, China,” he said. “For the very first time, because of generative AI computer technology, it’s going to impact literally every single country. So some of the markets will be quite large and global.”

Nvidia, which has become Wall Street’s favourite bet on AI, has managed to exceed analysts’ expectations for the past few quarters of earnings, and it may need to find new markets to maintain that streak.

Other tech companies that have been associated with the AI boom over the past year, such as chip-making rival Advanced Micro Devices, have posted earnings and outlooks this quarter that disappointed investors.

Nvidia may prove the exception. It is arguably the only tech company that has showed significant revenue growth from AI that has already transformed the chip supplier from a niche player to the biggest beneficiary of the AI boom.

Analysts are projecting that the surge in demand for Nvidia’s products will turn it into the biggest company by revenue in the semiconductor industry as early as 2025.